Which of the Following Is True Regarding Recording an Accounts

question 8

Multiple Choice

Which of the following is true regarding recording an accounts payable transaction?

• A)When a purchase is made,accounts payable is increased with a debit and when the bill is paid,accounts payable is decreased with a credit.
• B)Accounts payable transactions arise solely from inventory purchases and not service related payments.
• C)Accounts payable represents a note; a vendor ensures we sign an agreement with interest paid.
• D)When a purchase is made,accounts payable is increased with a credit and when the bill is paid,accounts payable is decreased with a debit.

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Definitions:

Business Judgment Rule

A rule protecting business managers from liability for making bad decisions when they have acted prudently and in good faith.

Uninformed Decisions

Choices made without access to all necessary information, knowledge, or understanding, which can lead to adverse outcomes.

Conflicts Of Interest

Situations where an individual's or organization's personal interests could potentially influence or appear to influence their decisions in their official capacity.

Supermajority Vote

A requirement that a motion must receive significantly more than a simple majority of votes, often two-thirds or three-quarters, to be approved.