Which of the Following Transactions Will Cause a Liability to Be

question 48

Multiple Choice

Which of the following transactions will cause a liability to be credited and an asset account to be debited when the perpetual inventory system is in use?

• A) Recorded the adjustment for depreciation
• B) Recorded the adjustment for the consumption of supplies
• C) Purchased merchandise inventory on account
• D) Purchased office supplies on account

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business for a specific period.

Disclosure

The act of providing important information to stakeholders, required by regulations to ensure transparency and fairness in financial reporting and corporate actions.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those presented on a bank statement to ensure accuracy and consistency in the accounts.