The Journal Entry for the Receipt of a Cash Payment

question 21

Multiple Choice

The journal entry for the receipt of a cash payment on common stock subscriptions would include

• A) debiting Cash and crediting Common Stock Subscriptions Receivable.
• B) debiting Cash and crediting Common Stock.
• C) debiting Common Stock and crediting Common Stock Subscriptions Receivable.
• D) debiting Common Stock Subscriptions Receivable and crediting Common Stock.

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Definitions:

Fiscal-Year

A one-year period used for financial reporting and budgeting that does not necessarily coincide with the calendar year; it can start on any day of the year.

Flexible Budgeting

A budgeting approach that allows for adjustments to budgeted figures based on changes in actual operating conditions.

Direct Labor

Refers to the wages and benefits for the employees who are directly involved in the manufacturing or production process.

Direct Materials

Raw materials that are directly traceable to the production of a specific good or service and constitute a part of the finished product.