If Girard Don, the Owner of Girard's Software Proprietorship, Uses

question 89

Multiple Choice

If Girard Don, the owner of Girard's Software proprietorship, uses cash of the business to purchase a personal computer, the business should record this use of cash with an entry to

• A) debit Salary Expense and credit cash.
• B) debit Girard Don, Salary and credit cash.
• C) debit cash and credit Girard Don, withdrawals
• D) debit Girard Don, capital and credit cash
• E) debit Girard Don, withdrawals and credit cash

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Definitions:

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Interest-Burden Ratio

A financial metric that shows how much of a company's income is consumed by interest expenses.

Debt

Debt refers to the amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, often with interest.

ROA

Return on Assets, a financial ratio that measures the profitability of a company in relation to its total assets, indicating how efficient management is at using assets to generate earnings.