A Company Paid Cash for an Amount Owed to a Creditor

question 93

Multiple Choice

A company paid cash for an amount owed to a creditor. This transaction decreased cash and:

• A)decreased expenses.
• B)increased expenses.
• C)decreased liabilities.
• D)decreased revenues.

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Definitions:

Equivalent Unit

A measure used in process costing that converts partially completed units into a number of fully completed units for accounting purposes.

First-in

A term often used to describe inventory valuation methods, implying the first items produced or purchased are the first sold.

Materials

Raw substances or components that are used in the manufacturing process to produce goods.

Processing Cost

This is the expense incurred during the operation of converting raw materials into finished products, including labor and overhead costs.