Free 1Z0-1055-21 Web TestEngine Demo

Q6 Single choice

An Office supplies company requires an advance payment of $8000 for the office supplies you wish to order. You enter and pay a prepayment type invoice for $8000. You enter the standard invoice to book the expense which totals $10000 and you apply the prepayment to the standard invoice.

What are the accounting entries for that standard invoice with the prepayment application?

A
Invoice accounting - Dr Prepayment Account 10000 Cr AP Liability Account 10000.The prepayment application has no impact on the Invoice.
B
Invoice accounting - Dr Expense Account 10000 Cr AP Liability Account 10000.Prepayment application
- Dr AP Liability 8000 Cr Prepayment Account 8000.
C
Invoice Accounting - Dr Prepayment Account 10000 Cr AP Liability Account 10000.Prepayment
application - Dr Expense Account 8000 Cr Prepayment Account 8000.
D
Invoice accounting - Dr Expense Account 10000 Cr AP Liability Account 10000.Prepayment application
- Dr AP Liability Account 2000 Cr Prepayment Account 2000.

1Z0-1055-21 Web TestEngine demo