Double-Entry Account Records Are Exchanged in a Transaction (Debits and Credits)

question 20

Multiple Choice

Double-entry account records are exchanged in a transaction (debits and credits) . Which of the following is recorded when a company purchases (receives) a computer and pays (gives) cash?

• A)The computer is recorded as a credit and the cash is recorded as a credit
• B)The computer is recorded as a debit and the cash is recorded as a debit
• C)The computer is recorded as a credit and the cash is recorded as a debit
• D)The computer is recorded as a debit and the cash is recorded as a credit

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Definitions:

Income Bonds

Bonds that pay interest only when the issuer has sufficient earnings, making them riskier than regular bonds that guarantee interest payments.

Rating

A rating refers to an evaluation or assessment of something's quality, quantity, or a combination thereof, often used in financial contexts to gauge the creditworthiness of entities.

Interest

The cost of borrowing money or the payment received for lending money, typically expressed as an annual percentage rate.

Call Provision

A clause in a bond or other fixed-income security that allows the issuer to repurchase and retire the debt before its maturity date.