When a Company Purchases an Asset but Only Pays for a Portion

question 71

Multiple Choice

When a company purchases an asset but only pays for a portion of it and owes the remainder,which of the following is true?

• A)The asset is debited for the amount paid plus the amount owed.
• B)The asset is debited for the amount paid.The amount owed will be debited to the asset once paid.
• C)The asset is credited for the amount paid plus the amount owed.
• D)The asset is credited for the amount paid.The amount owed will be debited to the asset once paid.

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Definitions:

Gainsharing Plan

A performance-based compensation strategy that allows employees to share in the company's savings or gains, often from productivity improvements.

Cost Data

Information related to the expenses incurred for producing a product or delivering a service.

Personal Interactions

The exchange of information and feelings between individuals or groups, often impacting the development of relationships.