Which of the following transactions for July represents an expense for the month?
A) Paid $15 000 in advance as first payment for a new computing system.
B) Purchased inventory on account for resale in August.
C) Paid cash of $2000 to the bank for July interest on loan.
D) Borrowed $80 000 from the bank, repayable over four years.

Question

Quizplus · Accepted Answer

Paying cash for loan interest represents an expense for the month. The other transactions are either prepaid expenses or purchases of assets/liabilities.

Which of the Following Transactions for July Represents an Expense