The store paid $500 cash to acquire a rare original choreography notes. Which entry is correct for the cash account?

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Multiple Choice

The store paid $500 cash to acquire a rare original choreography notes. Which entry is correct for the cash account?

When you pay cash to acquire an asset, you’re reducing the cash on hand and increasing the asset you gained. In double-entry accounting, assets increase with debits and decrease with credits. Since cash is an asset, paying cash means the cash account must be decreased, which is recorded as a credit. So the cash account is credited for 500, reflecting the cash outflow. The corresponding entry would debit the asset you acquired (the choreography notes) for 500.

The store paid $500 cash to acquire a rare original choreography notes. Which entry is correct for the cash account?

Prepare for the Asset Tracking and Sales Test by studying with curated questions and in-depth explanations. Master the material and boost your chances of success!

The store paid $500 cash to acquire a rare original choreography notes. Which entry is correct for the cash account?

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