A Check Drawn by a Company for $270 in Payment

question 119

Multiple Choice

A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. 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:

Equal Credit Opportunity Act

A U.S. law aimed at granting all individuals a fair opportunity to obtain credit, prohibiting discrimination based on race, color, religion, national origin, sex, marital status, age, or because someone receives public assistance.

Consumer Finance Corporation

A financial institution that provides loans to consumers for purchasing consumer goods and services.

Suitability

The appropriateness of a specific investment or financial decision to an individual's unique situation.

Fair Debt Collection Practices Act

A US federal law established to eliminate abusive practices in the collection of consumer debts, promote fair debt collection, and provide consumers with an avenue for disputing and obtaining validation of debt information.