On June 1, 2018 Ted Leo buys a copier machine for his business and finances this purchase with cash and a note. When journalizing this transaction, he will
A) use two journal entries.
B) make a compound entry.
C) make a simple entry.
D) list the credit entries first, which is proper form for this type of transaction.

Question

Quizplus · Accepted Answer

Since Ted Leo is using both cash and a note to finance the copier machine purchase, a compound entry should be made. A compound entry is used when multiple accounts are affected by a single transaction, and it simplifies the journalizing process.

On June 1, 2018 Ted Leo Buys a Copier Machine