Cash Contributed to a Joint Operation Was Used to Purchase

question 3

Multiple Choice

Cash contributed to a joint operation was used to purchase Equipment (€100 000) and raw materials (€70 000) . The following entry would be part of the overall recording of these transactions:

• A) \(\begin{array} { l c l l }
• \text { DR } & \text { Equipment } & € 100000 & \\
• \text { DR } & \text { Raw materials } & € 70000 & \\
• \text { CR } & \text { Cash } & & € 170000
• \end{array}\)
• B) \(\begin{array} { l r r r }
• \text { DR } & \text { Work in progress } & € 170000 & \\
• \text { CR } & \text { Joint operation capital } & & € 170000
• \end{array}\)
• C) \(\text { DR \quad Cash } \quad\quad\quad\quad € 170,000\)
• \(\text { CR } \quad \text { Contribution to joint operation } \quad € 170,000\)
• D) \(\begin{array}{lll}
• \text { DR } & \text { Cash }& € 170,000\\
• \text { CR } & \text { Equipment } & € 100,000 \\
• \text { CR } & \text { Raw materials } & € 70,000
• \end{array}\)

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Definitions:

Ordinary Annuity

A financial product where regular payments are received or paid at the end of each period, such as monthly or annually.

Compounded Monthly

Interest calculation method where interest is added to the principal each month, increasing the amount on which subsequent interest is calculated.

RRSP

A Registered Retirement Savings Plan that allows individuals in Canada to save for retirement on a tax-deferred basis.

Annuity Payment

A fixed amount of money paid to someone each period, typically for the rest of their life or for a fixed number of years, as part of an annuity contract.