Bertrand Inc

question 82

Multiple Choice

Bertrand Inc.purchased some shop equipment for $4,500 in cash.By mistake,the journal entry debited the Office Equipment account rather than the Shop Equipment account.What correcting entry would be necessary?

• A) Debit Office Equipment $4,500;credit Shop Equipment $4,500
• B) Debit Shop Equipment $4,500;credit Office Equipment $4,500
• C) Debit Cash $4,500;credit Shop Equipment $4,500
• D) Debit Office Equipment $4,500;credit Cash $4,500

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Definitions:

Purchased

Acquired by paying money or its equivalent; involves obtaining ownership of a good or service in exchange for monetary value.

MAGI

MAGI stands for Modified Adjusted Gross Income, a measure used in the U.S. tax code to determine eligibility for certain tax benefits by modifying the adjusted gross income with specific additions or deductions.

Net Investment Income

The income received from investment assets (like stocks, bonds, mutual funds) after deducting related expenses.

Surtax

An additional tax levied on top of the base tax liability; often applied to income exceeding a certain threshold.