A Business Purchases Equipment in Exchange for a Note Payable

question 157

Multiple Choice

A business purchases equipment in exchange for a note payable.This transaction results in ________.

• A) no journal entry because no cash has been paid
• B) a debit to Notes Payable and a credit to Equipment
• C) an increase in liabilities
• D) a debit to Equipment and a credit to Accounts Payable

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Definitions:

Financial Planning

The process of developing strategies to manage finances, including income, expenses, savings, and investments, to achieve financial goals.

Supply Chain Network Design

Planning and structuring a supply chain's logistics and distribution strategy to maximize efficiency and productivity.

Offshoring

The business practice of relocating manufacturing processes or services to another country to reduce costs.

Working Capital

Refers to a company's current assets minus its current liabilities, indicating the liquid capital available for day-to-day operations.