Which of the Following Could Be a Correct Journal Entry

question 23

Multiple Choice

Which of the following could be a correct journal entry to record the disposition of equipment?

• A) \[\begin{array} { | l | l | }
• \hline \text { Dr. } & \text { Accounts payable } \\
• \hline \mathrm { Cr } . & \text { Accumulated depreciation } \\
• \hline \mathrm { Cr } & \text { Depreciation expense } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline \text { Dr. } & \text { Cash } \\
• \hline \text { Dr. } & \text { Loss on sale of equipment } \\
• \hline \text { Dr. } & \text { Accurnulated depreciation } \\
• \hline \text { Cr. } & \text { Equipment } \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline \text { Dr. } & \text { Gain on sale of equipment } \\
• \hline \text { Dr. } & \text { Accumulated depreciation } \\
• \hline \text { Cr. } & \text { Equipment } \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline \text { Dr. } & \text { Cash } \\
• \hline \text { Dr. } & \text { Loss on sale of equipment } \\
• \hline \mathrm { Cr } . & \text { Accumulated depreciation } \\
• \hline \mathrm { Cr } & \text { Equipment } \\
• \hline
• \end{array}\]

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Definitions:

Perpetual Inventory System

An approach to inventory management where updates to inventory records are made in real-time after each purchase, sale, or return transaction.

Shrinkage

The loss of inventory that can occur due to theft, damage, or errors in a company's stock.

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances before preparing financial statements.

Operating Expenses

Costs associated with the day-to-day functions of a business excluding the cost of goods sold.