On June 1, 2017, Joanne White buys a copier machine for her business and finances this purchase with cash and a note. When journalizing this transaction, she will
A) use two journal entries.
B) make a compound entry.
C) make a simple entry.
D) wait until the end of the month to record the entry.

Question

Quizplus · Accepted Answer

Since Joanne is using both cash and a note to finance the purchase, a compound entry should be made to reflect both aspects of the transaction in one entry. Waiting until the end of the month to record the entry would not be appropriate since it would not accurately reflect the timing of the transaction. Using two journal entries would unnecessarily complicate the accounting records and a simple entry would not capture the full details of the transaction.

On June 1, 2017, Joanne White Buys a Copier Machine