The Purchase of a Building with a Cash Down Payment

question 129

Multiple Choice

The purchase of a building with a cash down payment and a written promise to pay the balance in the future would include a:

• A) credit to Cash and a credit to Note Payable
• B) debit to Cash and a credit to Buildings
• C) debit to Note Payable and a credit to Cash
• D) debit to Cash and a debit to Note Payable

---

Definitions:

Land Sale

A transaction involving the conveyance of ownership in land from one party to another, often recorded as a capital transaction in financial statements.

Operating Income

This is the profit realized from a business's ongoing operations, calculated as the difference between operating revenues and operating expenses.

Land Account

A type of asset account on the balance sheet representing the cost of land owned by a company.