Cash Contributed to a Joint Operation Was Used to Purchase

question 26

Multiple Choice

Cash contributed to a joint operation was used to purchase machinery ($500 000) and raw materials ($120 000) . The following entry would be part of the overall recording of these transactions:

• A) DR Machinery $500 000 DR Raw materials $ 120 000
• CR Cash $620 000
• B) DR Work in progress $620 000 CR Joint operation capital $620 000
• C) DR Cash $620 000 CR Contribution to joint operation $620 000
• D) DR Cash $620 000 CR Machinery $500 000
• CR Raw materials $ 120 000

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Definitions:

Contracting Parties

The individuals, entities, or organizations that enter into a contractual agreement.

Flexibility

The quality of being adaptable or the capacity to be easily modified or adjusted in response to changing conditions.

Conform

To act in accordance with rules, standards, or norms.

Price per Unit

The cost associated with a single unit of a product or service, allowing for comparison and calculation of total costs.