A Transaction Has Been Recorded in the T-Accounts of Simpson

question 108

Multiple Choice

A transaction has been recorded in the T-accounts of Simpson Company as follows: Which of the following could be an explanation for this transaction?

• A)The company borrowed $850.
• B)The company loaned $850 to another company.
• C)The company repaid a $850 debt.
• D)Simpson acquired $850 cash from the issue of common stock.

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Definitions:

Joint Control

A situation in an arrangement where more than one party has control together, requiring unanimous consent for decision-making.

Economic Entity

An organization or unit in the economy that is capable of conducting economic activities, such as businesses or households.

Contractually Agreed

Pertains to terms, conditions, or arrangements that have been explicitly consented to by all parties involved through a formal contract.

Partial Exemption Disclosures

Disclosures that allow entities to omit certain details from financial statements under specific circumstances, provided partial information is still disclosed.