Which of the Following Journal Entries Is Correct When a Business

question 37

Multiple Choice

Which of the following journal entries is correct when a business entity builds an addition to the factory building by paying cash to a contractor?

• A) Retained Earnings
• \( \quad \)Cash
• B) Building
• \( \quad \) \( \quad \)Contributed Capital
• C) Cash
• \( \quad \)Building
• D) Building
• \( \quad \)Cash

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Definitions:

Financial Performance

A measure of how well a company uses its assets to generate revenues and manage its financial activities.

Operating Income

Income generated from regular business operations, calculated by subtracting operating expenses from gross profit.

Customer Satisfaction Rating

A measure used to gauge the degree to which a product or service meets or surpasses customer expectations.

Internal Processes Perspective

An approach focusing on the operations and procedures within a company to improve performance and value creation.