Question

Which of the following is an asset use transaction?

a. Purchased machine for cash
b. Recorded insurance expense at the end of the period
c. Invested cash in an interest earning account
d. Accrued salary expense at the end of the period

Answer 1

Answer:

a. Purchased machine for cash

Explanation:

Purchase of machinery is an asset use transaction is reduce the cash as an asset to purchase a machine. All the other options do not use/ reduce any asset in the transactions.  The investment is the interest earning account is actually considered as cash equivalent, so it does not use the asset. So, option a is appropriate answer.