Which of the following transactions should be recorded using a compound journal entry?
A) Common stock is issued for cash.
B) The company receives payment on account from a customer.
C) The company pays a two-year insurance premium.
D) The company purchases a desk, paying 10% in cash with the balance due in 60 days.
E) None of the above

Question

Quizplus · Accepted Answer

A compound journal entry is used when a transaction affects more than two accounts. In option D, the company's purchase of a desk involves at least three accounts: an asset account (for the desk), a cash account (for the down payment), and a liability account (for the balance due).

Which of the Following Transactions Should Be Recorded Using a Compound