Able and Sons,Inc.purchases a building for $35,000 cash.The journal entry would include a:
A)debit to Building and a credit to Cash.
B)debit to Common Stock and a credit to Building.
C)debit to Building and a credit to Accounts Payable.
D)debit to Building and a credit to Common Stock.

Question

Quizplus · Accepted Answer

The company purchased a building for cash, which means there is a decrease in cash (credit) and an increase in the building asset (debit). Option A is the only choice that reflects this transaction. Option B is incorrect because it involves issuing stock which is not mentioned in the question. Option C is incorrect because the company did not purchase the building on credit. Option D is incorrect because the company did not issue stock.