On June 1, 2014, 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

When purchasing an asset like a copier machine with a combination of cash and a note, the transaction involves more than two accounts (the asset account, cash, and notes payable). Therefore, a compound entry, which involves more than two accounts, is required to record all aspects of the transaction in one journal entry.

On June 1, 2014, Joanne White Buys a Copier Machine