A Business Purchased a Building by Paying Part of the Purchase

question 82

Multiple Choice

A business purchased a building by paying part of the purchase price in cash as a down payment and signing a mortgage note for the remainder.The business should:

• A) debit the mortgage note payable for the amount of the mortgage.
• B) debit the building account for the amount of the mortgage.
• C) debit cash for the amount paid on the down payment.
• D) credit the mortgage note payable for the amount of the mortgage.

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Definitions:

Semiweekly Schedule Depositor

A tax deposit schedule required for employers who accumulate a certain amount of tax liability within a specific timeframe, mandating deposits to be made semi-weekly.

Federal Income Tax

Federal income tax is a tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Wage Bracket Table

A chart used in the calculation of payroll taxes, indicating the amount of tax to be withheld based on the employee's earnings and tax status.

Excess Social Security Tax

The amount by which Social Security taxes withheld exceed the maximum limit set for the year.