A Business Purchases Equipment for Cash in the Amount of $8,000.Which

question 140

Multiple Choice

A business purchases equipment for cash in the amount of $8,000.Which account is credited?

• A) Cash
• B) Accounts payable
• C) Utilities expense
• D) Equipment

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; this expense is a non-operating cost that appears on the income statement.

Decimal Place

The position of a number to the right of a decimal point, indicating the precision or fractional part of the number.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership equity held by stockholders.

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted to cash in the short term.