Which of the Following Statements Is True Regarding Simple and Compound

question 58

Multiple Choice

Which of the following statements is true regarding simple and compound entries?

• A) Simple entries can be prepared by anyone whereas compound entries need to be prepared by a skilled accountant.
• B) Simple entries are recorded on the income statement whereas compound entries are recorded on the statement of financial position.
• C) Simple entries involve one account, whereas compound entries involved 2 or more accounts.
• D) An example of a compound entry would be the purchase of a machine for $400 cash and a $2,000 note payable.

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Definitions:

Open Book Management

A business strategy where a company shares financial and performance data with all employees to involve them more in operations.

IT Company

A business enterprise that specializes in delivering technology-related services and solutions, including software development, IT consultancy, and hardware installation.

Regular Basis

Occurring frequently or at evenly spaced intervals over time.

Earnings

The profit or income generated from work, investments, or business operations after deducting expenses.