Dorchester Museum Purchased a Computer for $3,600 on December 1

question 140

Multiple Choice

Dorchester Museum purchased a computer for $3,600 on December 1. It is estimated that the useful life of the computer will be 3 years. If financial statements are to be prepared on December 31, the company should make the following adjusting entry

• A) debit Depreciation Expense, $100; credit Computer, $100.
• B) debit Depreciation Expense, $100; credit Accumulated Depreciation, $100.
• C) debit Depreciation Expense, $1,200; credit Accumulated Depreciation, $1,200.
• D) debit Cash, $100; credit Accumulated Depreciation, $100.

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Definitions:

Production Possibilities

The various combinations of goods and services that an economy can produce when all its resources are fully and efficiently employed, illustrated by the production possibilities frontier.

Capital Goods

Assets utilized by businesses to create wealth through the manufacturing of goods and services, including buildings and tools.

Opportunity Cost

The sacrifice of potential rewards from different possibilities upon opting for one alternative.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods or services that can be produced with given resources and technology.