Which of the following statements is correct? 54)
A)Goods and services are commonly sold to customers on the basis of oral or implied promises of future payment, called promissory notes.
B)Increases and decreases in cash are always recorded in the equity account.
C)An account called Land is commonly used to record increases and decreases in the land and buildings owned by a business.
D)When an insurance premium is paid in advance, the payment is normally recorded in a liability account called Prepaid Insurance.
E)None of these statements are correct.

Question

Quizplus · Accepted Answer

None of the statements are correct. Promissory notes are written promises, not oral or implied. Cash changes are recorded in cash accounts, not equity. Land accounts record land, not buildings. Prepaid Insurance is an asset, not a liability.

Which of the Following Statements Is Correct? 54)