For Each of the Following Transactions of Chen Inc

question 43

Essay

For each of the following transactions of Chen Inc., identify the account to be debited and the account to be credited.
1. Purchased 18-month insurance policy for cash.
2. Paid weekly payroll.
3. Purchased supplies on account.
4. Received utility bill to be paid at later date.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, important in investment analysis and valuation.

Finance Lease

A type of lease agreement where the lessee assumes substantially all the risks and rewards of ownership of the asset.

IFRS

International Financial Reporting Standards, which are international accounting guidelines for preparing financial statements.

Lessee

A person or entity that leases an asset from another, acquiring the right to use the asset for a specified period in exchange for periodic payments.