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

question 26

Multiple Choice

An accountant has debited an asset account for $1,000 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 $500.
• B) Credit another liability account for $500.
• C) Credit an owner's equity account for $500.
• D) Debit an owner's equity account for $500.

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Definitions:

Manufacturing Firm

A company engaged in the industrial process of producing goods through physical, chemical, or mechanical transformation of materials or components.

Retail Chain

A network of stores operated by the same company, offering similar or related products or services to consumers.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or investments.

Cash Flows

The movement of money into and out of a company from operational, investment, and financing activities.