Which of the Following Statements Is Correct

question 77

Multiple Choice

Which of the following statements is correct?

• A) When an insurance premium is paid in advance, the payment is normally recorded in a liability account called Prepaid Insurance.
• B) Goods and services are commonly sold to customers on the basis of oral or implied promises of future payment, called promissory notes.
• C) Increases and decreases in cash are always recorded in the equity account.
• D) An account called Land is commonly used to record increases and decreases in the land and buildings owned by a business.
• E) None of these statements are correct.

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Definitions:

Oral Contract

An agreement between parties that is spoken, not written, but is still legally binding under certain conditions.

Air-Conditioning

A system designed to control the temperature, humidity, and quality of air in a building or vehicle, improving comfort.

Heating Maintenance

The routine service and care conducted to ensure a heating system functions efficiently and safely.

Memorandum

A written record or communication used in business or diplomacy to officially document and share information.