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 implies that there is a purchase of land and cash is used to make the transaction. Therefore, there will be an increase in Land (asset account) and a decrease in Cash (asset account). Choice B shows an increase in Land and a decrease in Cash, making it the best choice.

What Effect Does This Journal Entry Have on the Accounts