The Purchase of Office Computers for Cash Would Include a Debit

question 44

Multiple Choice

The purchase of office computers for cash would include a debit to:

• A)Cash and a credit to Office Equipment.
• B)Office Equipment and a credit to Accounts Payable.
• C)Accounts Receivable and credit to Office Equipment.
• D)Office Equipment and a credit to Cash.

---

Definitions:

Operating Activity

Business activities directly related to the production and delivery of goods and services for profit.

Indirect Method

In the context of cash flow statement preparation, the indirect method adjusts net income for the effects of non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.

Statement of Cash Flows

The statement of cash flows is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.