Consider Each of the Items Below

question 13

Multiple Choice

Consider each of the items below. Place the proper letter in the blank space provided to indicate the nature of the account or accounts to be debited when recording each transaction using the preferred accounting treatment. Prepayments should be recorded in balance sheet accounts. Disregard income tax considerations unless instructed otherwise.
-In March, the Lyon Theatre bought projection equipment on the installment basis. The contract price was $23,610, payable $5,610 down, and $2,250 a month for the next eight months. The cash price for this equipment was $22,530.

• A)asset(s) only
• B)accumulated amortization, depletion, or depreciation only
• C)expense only
• D)asset(s) and expense
• E)some other account or combination of accounts

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Definitions:

Accrued Payroll Liabilities

Obligations for salaries and wages that have been incurred but not yet paid to employees.

Retained Earnings

The portion of net income that is not distributed as dividends to shareholders, but retained by the company for reinvestment in its operations.

Revenue From Rent

Income generated from leasing properties or spaces to tenants.

Collected In Advance

Revenue received before the related goods or services are delivered, also known as deferred revenue.