The Purchase of a Machine on Credit Was Recorded as a Debit

question 55

Multiple Choice

The purchase of a machine on credit was recorded as a debit to Machinery, a debit to Discount on note payable, and a credit to Notes payable. Under IFRS, at the end of the accounting period, any unamortized debit balance in the discount account should be reported as a(n) :

• A) asset.
• B) a direct reduction to the liability - without using a contra account.
• C) expense.
• D) liability.

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Definitions:

Over The Counter

Financial securities that are traded directly between parties, typically through a dealer network, as opposed to on a centralized exchange.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Register With

To officially record or enroll one's personal details or information with a certain organization, authority, or system.

Board Of Directors

A group of individuals elected by shareholders to oversee the management and strategic direction of a corporation.