Bonnie's Baskets Purchases $2,000 Worth of Office Equipment on Account

question 120

Multiple Choice

Bonnie's Baskets purchases $2,000 worth of office equipment on account.This causes:

• A)Cash and Capital to decrease.
• B)Office Equipment and Accounts Payable to increase.
• C)Office Equipment to decrease and Accounts Payable to increase.
• D)Accounts Payable to increase and Capital to decrease.

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, measured in terms of the amount of finished goods those partial items represent.

Weighted Average Method

A cost accounting method that calculates the cost per unit of inventory by considering the weight of each period’s inventory cost.

Weighted Average Method

An inventory costing method that assigns an average cost to each unit in inventory, calculated by dividing the total cost of goods available by the total units available.

Equivalent Units

A term used in cost accounting to represent a partial completion of a product, measured in units of a fully completed product.