An Accountant Has Debited an Asset Account for $1,300 and Credited

question 97

Multiple Choice

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

• A) Credit an asset account for $800.
• B) Credit another liability account for $800.
• C) Credit a Stockholders' account for $800.
• D) Debit a Stockholders' account for $800.

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Definitions:

Maturity Date

the specific date on which a financial instrument, such as a loan or bond, reaches its expiration and the principal is due to be repaid.

Promissory Note

A financial instrument containing a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.

Negotiable

Capable of being transferred or assigned from one party to another, often used in the context of financial instruments.

Nonexistent Person

A fictional or imagined individual who does not exist in reality.