An Accountant Has Debited an Asset Account for $1,000 and Credited

question 156

Multiple Choice

An accountant has debited an asset account for $1,000 and credited a liability account for $500. What can be done to complete the recording of the transaction?

• A) Nothing further must be done.
• B) Debit an equity account for $500.
• C) Debit another asset account for $500.
• D) Credit a different asset account for $500.

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Definitions:

Contract Implied

A legal agreement created by the actions, behavior, or circumstances of the parties involved, rather than by their written or spoken words.

Mutual Intent

The shared understanding and agreement between parties involved in a contract or negotiation.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party if the latter has reasonably relied on that promise to their detriment.

Traditional Contract

A legally binding agreement following established legal formats and norms, typically involving a written document.