Company a Purchases U

question 64

Multiple Choice

Company A purchases U.S.Treasury bills for $23,700.This investment will be held to maturity.The bills will mature in 90 days at $24,000.The entry to record the initial investment will include a

• A)credit to Short-Term Investments for $23,700.
• B)debit to Short-Term Investments for $23,700.
• C)debit to Short-Term Investments for $24,000.
• D)credit to Interest Receivable for $300.

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Definitions:

Prepaid Freight Costs

Expenses paid in advance for the transportation of goods, often included in the inventory cost.

Sales Amount

The total revenue generated from the sale of goods or services over a specific period.

FOB Destination

A shipping term indicating that the seller is responsible for the goods and the cost of transport until they are delivered to the buyer's location.

Prepaid Freight Costs

Expenses paid in advance for the transportation of goods.