A. Asset Account, Crediting Cash Account
B. Cash Account, Crediting Asset Account
C. Purchase of Business Account, Crediting Sale of Business Account
D. Asset Account, Crediting Purchase of Business Account
Correct Answer: Option A
A. Asset Account, Crediting Cash Account
Explanation
Debit the appropriate asset account in a journal entry in your records by the cost of the asset. Credit the cash account in the same journal entry by the amount of cash you used toward the purchase. If you paid all cash, this amount is the same as the asset’s cost.
