A Check Drawn by a Company for $340 in Payment

question 158

Multiple Choice

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

• A) debit Accounts Payable; credit Cash
• B) debit Cash; credit Accounts Receivable
• C) debit Cash; credit Accounts Payable
• D) debit Accounts Receivable; credit Cash

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Definitions:

Delaying Sales

A strategy where sellers postpone transactions in anticipation of better market conditions or prices.

Accelerating Expenses

Expenses that increase at a faster rate than usual, often outpacing revenue growth.

Channel Stuffing

A practice where a company inflates its sales and earnings figures by deliberately sending retailers along its distribution channel more products than they can sell to the end-user.

Earned Revenue

Income a company receives from its business activities, such as sales of goods or services, in contrast to revenue from investments or other sources.