Billton Company Purchased a Machine in the Current Year for $18,000

question 59

True/False

Billton Company purchased a machine in the current year for $18,000. Payment included cash, $5,000; a one-year note payable, $5,000; and a 2-year, $8,000 note payable. This decreases cash by $5,000 in the current year.

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Definitions:

Cash Sales

Transactions in which goods or services are paid for and received at the time of the sale, using cash or equivalent.

Sales Taxes

Taxes imposed by governments on the sale of goods and services.

Journal Entry

A record in accounting that notes transactions and changes in financial statements.

Net Pay

The amount of money an employee takes home after all deductions, such as taxes and benefits, are taken out of their gross salary.