Accounting Transaction Analysis Quiz
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Questions and Answers

When should the Comfy Sweatpants Company record the supplies inventory as an asset?

  • After the liability is recorded
  • After paying on account
  • Once the goods have been received
  • On the order date (correct)

    • What should the accounting clerk do regarding debiting accounts payable for the order?

  • Debit accounts payable after paying on account
  • Debit accounts payable on the order date (correct)
  • Wait until supplies inventory are received to debit accounts payable
  • Do not debit accounts payable

    • Why is it important for the Comfy Sweatpants Company to record supplies inventory as an asset on the order date?

  • To comply with accounting principles (correct)
  • To delay recognizing liabilities
  • To improve cash flow
  • To match expenses with revenue

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