Which of the following accounts will be credited if a company purchases building for cash?
Correct answer: D. Cash account
- A. Capital account
- B. Fixed assets account
- C. Building account
- D. Cash account
Explanation
Purchasing a building for cash increases the Building account and decreases Cash. Therefore, Cash is credited because it is the asset given up.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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