Junction Plants Had the Following Transactions During August

question 66

Multiple Choice

Junction Plants had the following transactions during August. Which transaction represents an expense for August under the accrual basis of accounting?

• A) Used $90 worth of office telephone calls. The account will be paid during September.
• B) Paid $3300 in settlement of a loan obtained three months earlier.
• C) Paid a plumber $500 for repair work performed in July.
• D) Purchased a computer for $3000 cash.

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Definitions:

Operating Expenses

Expenses related to the routine functioning of a company, not including the expenses of products sold.

Operating Profit

Profit earned from a firm's core business operations, excluding deductions of interest and tax.

Potted Poinsettias

A common household plant, particularly popular during the holiday season, characterized by its red and green foliage.

Operating Profit

A company's profit from its regular business operations, excluding expenses from interest, taxes, and other non-operational activities.