Which of the Following Journal Entries Is Correct When a Business

question 41

Multiple Choice

Which of the following journal entries is correct when a business entity uses cash to pay an account payable?

• A) Accounts Payable
• \( \quad \) \( \quad \)Cash
• B) Retained Earnings
• \( \quad \) \( \quad \)Cash
• C) Cash
• \( \quad \)Accounts Payable
• D) Cash
• \( \quad \)Notes Payable

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Definitions:

Stock Price

The current price at which a share of a company is bought or sold in the stock market.

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet.

Return on Total Assets

A financial ratio that measures a company's profitability relative to its total assets.

Total Assets

The sum of all assets owned by a company, reflecting its overall resources, including both current and non-current assets.