A Company Purchased a Truck for $800 on Credit

question 147

Multiple Choice

A company purchased a truck for $800 on credit. The journal entry to record this transaction, however, was a debit to 'Truck' for $700 and a credit to 'Account Payable' for $700. What will the effect be on the trial balance?

• A)Debits will be $100 less than credits.
• B)Debits will be $100 more than credits.
• C)The trial balance will still balance.
• D)None of the above

Understand the calculation of weighted average number of shares for basic earnings per share.

Know the compromise and choices offered to companies by SFAS No. 123 regarding stock options.

Recognize the different periods associated with stock options such as vesting period and holding period.

Understand the accounting treatment for compensatory stock option plans.

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Definitions:

Independent Events

Two or more events where the outcome of one event does not affect the outcome of another.

P(A and B)

The probability of both event A and event B occurring in a joint probability distribution.

Independent Events

Events whose occurrence or outcome does not influence the occurrence or outcome of another event.

Conditional Probability

The probability of an event occurring, given that another event has already occurred.