The Sale of an Asset on Credit for What It

question 183

Multiple Choice

The sale of an asset on credit for what it cost

• A) increases assets and liabilities.
• B) decreases assets and liabilities.
• C) leaves total assets unchanged.
• D) decreases assets and increases liabilities.

---

Definitions:

Revenue Accounts

Revenue accounts are those used in accounting to track the income generated by a business from its normal operations.

Income Summary

An account used in closing entries to summarize revenues and expenses for a specific accounting period before transferring the net income to retained earnings.

Reversing Entries

Accounting entries made at the beginning of a new period to negate the effects of adjustments made at the end of the previous period.

Accrued Wages

Wages that have been earned by employees but have not yet been paid by the end of the accounting period.