INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-You bought a $500 stereo on the installment plan and made two payments of $75 during the year.On your income/expense statement for the year,you will show an expense of [$150 | $500].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.

Question

Quizplus · Accepted Answer

The expense on the income/expense statement will show the total amount paid during the year, which is $150 ($75 x 2). The cost of the stereo, which is $500, is not an expense for the current year, but rather a liability to be paid off over time.

INSTRUCTIONS: Choose the Word or Phrase in [ ] Which