Which of the following will not result in recording a transaction?
A) Signing a contract to have an outside cleaning service clean oﬃces nightly.
B) Paying our employees their wages.
C) Selling shares to investors.
D) Buying equipment and agreeing to pay a note payable and interest at the end of a year.

Question

Quizplus · Accepted Answer

Transactions are recorded when an economic event that affects the financial position of the company occurs. Signing a contract, as in option A, does not itself change the financial position until cash or services are exchanged. Paying wages, selling shares, and buying equipment with a note payable all involve immediate changes to the company's financial position, thus they are recorded.

Which of the Following Will Not Result in Recording a Transaction