The Great Gap University Issues Long-Term Debt to Build a Bridge

question 69

Multiple Choice

The Great Gap University issues long-term debt to build a bridge over the gap between its two main campuses.The debt would be accounted for in the

• A)​Unexpended Plant Fund.
• B)​Plant Fund for Renewals and Replacement.
• C)​Plant Fund for Retirement of Indebtedness.
• D)​Investment in Plant.

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Definitions:

Matching Concept

An accounting principle that dictates expenses should be matched with the revenues they help to generate within the same accounting period.

Clearinghouse Collection Fee

A charge levied by a clearinghouse for handling the processing and settlement of transactions between financial institutions.

Credit Card Sales

Transactions in which customers use credit cards to pay for goods or services, creating a receivable for the seller until payment is processed by the card issuer.

Summary Journal Entry

A consolidated record that summarizes multiple transactions into a single entry within the accounting records.