A Corporation Made the Following Entries Which Entry Must Have Been Made as a Direct Result

question 92

Multiple Choice

A corporation made the following entries: $\begin{array}{lll}\text {A) Prepaid insurance }&900\\\text { Cash}&&900\\\text {B) Depreciation expense }&10,000\\\text {Accumulated depreciation }&&10,000\\\text {C) Wages payable }&3,000\\\text {Cash }&&3,000\\\text { D) Inventory of Merchandise}&4,000\\\text { Accounts payable}&&4,000\\\end{array}$ Which entry must have been made as a direct result of the matching principle?

• A)A
• B)B
• C)C
• D)D

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Definitions:

Held Abroad

Refers to assets or investments located or held in a foreign country, outside of the investor's home nation.

Unit Of Account

The yardstick people use to post prices and record debts.

Legal Tender

Legal tender refers to money that must be accepted if offered in payment of a debt in the jurisdiction where the payment is being made.

Medium Of Exchange

An item that buyers give to sellers when they want to purchase goods and services.