P Baker Deposits $10,000 in a Bank Account, in the Name

question 60

Multiple Choice

P. Baker deposits $10,000 in a bank account, in the name of his business, to be used to purchase equipment. The journal entry to record the transaction would involve a:

• A) credit to Equipment.
• B) credit to Cash.
• C) credit to P. Baker, Capital.
• D) credit to P. Baker, Drawing.

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Definitions:

Capital Goods

Physical assets that a company uses in the production process to manufacture products and services that consumers will later use.

Opportunity Cost

Giving up possible benefits from other solutions when a single solution is chosen.

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over a period of time.

Entrepreneurship

The act of creating, organizing, and running a new business venture, typically characterized by risk-taking and innovation to achieve profit and growth.