Your Bookkeeper Is Off for the Day and You Are

question 128

Multiple Choice

Your bookkeeper is off for the day and you are trying to figure out what her last entry in the journal could be for.Unfortunately, she only recorded the debit side of the transaction as $4,400 to Accounts Payable.It is possible that this debit could correspond to:

• A) A purchase of equipment costing $4,400 on credit.
• B) A payment of $4,400 to a supplier to settle a balance due.
• C) A $4,400 sale to a customer.
• D) A $4,400 issuance of the company's capital stock.

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Definitions:

Income Splitting

A tax strategy used to transfer income from a higher-tax-rate taxpayer to a lower-tax-rate taxpayer to reduce the total tax paid.

Salary Allowances

Additional monetary benefits provided to employees on top of their regular salary, potentially for specific purposes or expenses.

Capital Account

An account on a country's balance of payments that records transactions involving the purchase and sale of assets, representing changes in ownership of international assets.

Partnership Agreement

A contract between partners in a business that outlines the terms of the partnership, roles, and share of profits or losses.