What effect does this journal entry have on the accounts?
A)Increase to Cash and increase to Land
B)Increase to Land and decrease to Cash
C)Decrease to Cash and decrease to Land
D)Increase to Cash and decrease to Land

Question

What effect does this journal entry have on the accounts?
A)Increase to Cash and increase to Land 
B)Increase to Land and decrease to Cash 
C)Decrease to Cash and decrease to Land 
D)Increase to Cash and decrease to Land

Quizplus · Accepted Answer

The journal entry indicates that there was a purchase of land, which would lead to a decrease in cash (as money was spent to acquire the land) and an increase in the land asset account. Therefore, the correct answer is B: Increase to Land and decrease to Cash.

What Effect Does This Journal Entry Have on the Accounts