A Corporation Made the Following Entries Which Entry Must Have Been Made as a Direct Result

question 55

Multiple Choice

A corporation made the following entries: $$\begin{array} { | l | l | l | } \hline \text { A. Prepaid insurance } & 900 & \\\hline \text { Cash } & & 900 \\\hline \text { B Deprec iation expense } & 10,000 & \\\hline \text { Accumulated depreciation } & & 10,000 \\\hline \text { Chages payable } & 3,000 & \\\hline \text { Cash } & & 3,000 \\\hline \text { D mientory of Merchandise } & 4,000 & \\\hline \text { Accounts payable } & & 4,000 \\\hline\end{array}$$ Which entry must have been made as a direct result of the matching principle?

• A) A
• B) B
• C) C
• D) D

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Definitions:

Contract

A legally enforceable agreement between two or more parties that creates mutual obligations enforceable by law.

Rights

Entitlements or permissions granted to individuals or groups by legal systems, societal norms, or moral principles, often protected by law.

Vest

To mature, as in the maturation of rights that allow a party to act legally on the rights.

Perfect

To complete all required legal steps to finalize a lien, security interest, or title claim on property, ensuring it is enforceable against third parties.