A Business Pays a Creditor on Account

question 79

Multiple Choice

A business pays a creditor on account. The journal entry to record this transaction is:

• A) Debit Accounts Payable; Credit Cash
• B) Debit Accounts Receivable; Credit Accounts Payable
• C) Debit Cash; Credit Accounts Payable
• D) Debit Accounts Receivable; Credit to Cash

Analyze the flow of cash through the preparation of a cash budget.

Understand the financial impact of credit sales and cash collections on budgeting.

Calculate budgeted sales and understand their influence on other budget components.

Understand the concept of a budget sequence and its importance in financial planning.

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Definitions:

Perfectly Inelastic

Perfectly inelastic describes a situation where the quantity demanded or supplied does not change in response to a change in price.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured or reimburses the insured for expenses incurred from illness or injury.

Americans

Residents or citizens of the United States of America.