Joe Donaldson Deposited $80,000 in a Bank Account, Purchased a Company

question 26

Multiple Choice

Joe Donaldson deposited $80,000 in a bank account, purchased a company for $60,000 cash (Building $40,000 and Inventory $20,000) , performed services for clients for $10,000 cash, purchased supplies for $5,000 cash, and paid utilities of $2,000 cash. The journal entry to record the purchase of the company includes a:

• A)credit to Building for $40,000.
• B)debit to Common Stock for $60,000.
• C)debit to Inventory for $20,000.
• D)credit to Cash for $40,000.

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Definitions:

Correlation

A statistical measure that describes the extent to which two variables change together, but does not necessarily imply causation.

Mental Alertness

The state of being fully attentive and responsive to the environment or stimuli, characterizing good cognitive functioning.

The Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Experimental Research

A method of research that tests a hypothesis through the manipulation of variables and controlled conditions to determine cause and effect.