Able and Sons,Inc

question 95

Multiple Choice

Able and Sons,Inc.purchases a building for $35,000 cash.The journal entry would include a:

• A)debit to Building and a credit to Cash.
• B)debit to Common Stock and a credit to Building.
• C)debit to Building and a credit to Accounts Payable.
• D)debit to Building and a credit to Common Stock.

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Definitions:

Money Creation

The process by which the money supply of a country is increased through the activities of its central bank and commercial banking system.

Banking System

The network of banks and financial institutions that provide banking services, including deposits, loans, and currency exchange.

Required Reserve Ratio

The minimum percentage of deposits that a bank must hold in reserve and not lend out.

Excess Reserves

Funds that banks hold over and above the required reserve ratio set by the central bank, often earning interest.