Which of the Following Journal Entries Would Be Recorded If $$\begin{array} { | c | r | r | } \hline \text { Cash } & 750 & \\\hline \text { Accounts Payable } & & 750 \\\hline\end{array}$$

question 56

Multiple Choice

Which of the following journal entries would be recorded if a business makes a cash payment to a supplier of $750 on account? (The business had purchased office supplies on account in the previous month.)

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Cash } & 750 & \\
• \hline \text { Accounts Payable } & & 750 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 750 & \\
• \hline \text { Cash } & & 750 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Cash } & 750 & \\
• \hline \text { Office Supplies } & & 750 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 750 & \\
• \hline \text { Office Supplies } & & 750 \\
• \hline
• \end{array}\]

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Definitions:

Operating Cycle

The period from the acquisition of inventory to the collection of cash from receivables, reflecting a company's efficiency in managing its working capital.

Readily Marketable

Assets or securities that can be easily sold or converted into cash, typically without significant loss of value.

Short-Term Investments

Assets that can be easily converted into cash within a short timeframe, typically one year or less, without losing value.

Marketable Debt Securities

Investments in bonds or other debt securities that are available for sale before their maturity date.