On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Olive should record:
A. A debit to Cash for $7,500 and a credit to an expense for $7,500.
B. A debit to a prepaid expense and a credit to Cash for $7,500.
C. A debit to an expense and credit to a prepaid expense for $7,500.
D. A credit to a prepaid expense and a debit to Cash for $7,500.
E. A debit to an expense and credit to Cash for $7,500.
Answer: B
You might also like to view...
The special journal to record a purchase of merchandise on account is the ____________________ journal
Fill in the blank(s) with correct word
Once you have been able to gain allies and overcome employee resistance, excellent ______ will be a key to fostering innovation.
A. organization B. communication C. production D. execution E. recognition
Royer Corporation engaged in this transaction: Received dividends on securities held. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows
a. Schedule of noncash investing and financing transactions b. Operating activities section c. Financing activities section d. Investing activities section
Ancona and Caldwell (1990) present a model of group development based on the:
a. Notion of punctuated equilibrium b. Cyclical nature of team development c. Changing nature of tasks and how these changes affect internal processes and external relations d. Temporal nature of teams