Identify the Statement Below That Is Correct

question 32

Multiple Choice

Identify the statement below that is correct.

• A)When a future expense is paid in advance,the payment is normally recorded in a liability account called Prepaid Expense.
• B)Promises of future payment by the customer are called accounts receivable.
• C)Increases and decreases in cash are always recorded in the common stock account.
• D)An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business.
• E)Accrued liabilities include accounts receivable.

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Definitions:

Stockholders' Equity

Represents the equity stake currently held by all shareholders of a company, calculated as the total assets minus total liabilities.

Working Capital

The distinction between an organization's immediate assets and liabilities, showing its short-term fiscal well-being and effectiveness in operations.

Plant and Equipment

Long-term tangible assets used in the operation of a business, not intended for sale.

Noncurrent Assets

Long-term assets that are not expected to be converted into cash, sold, or consumed within one year or the operating cycle, including property, plant, and equipment.