A business bought a new delivery truck worth $45,000.They paid $5,000 down and took out a loan for the balance.How would the transaction be recorded?

Question

Quizplus · Accepted Answer

The best choice is A as it correctly records the purchase of the delivery truck. The capital asset account is debited for the cost of the truck, and cash is credited for the down payment. The remaining balance is recorded as a liability in the bank loan account. Therefore, Dr.Capital assets $45,000, Cr.Cash $5,000, Cr.Bank loan $40,000 is the correct transaction recording for the business.

A Business Bought a New Delivery Truck Worth $45,000