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Purchases of a new fixed asset in 2017 will need to be entered on the _____. A. 2017 Pro Forma Income Statement B. 2017...

Purchases of a new fixed asset in 2017 will need to be entered on the _____.

A. 2017 Pro Forma Income Statement

B. 2017 Schedule of Cash Disbursements

C. 2017 Schedule of Cash Receipts

D. all of the above

E. only A and B

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Answer #1

Answer is option B - 2017 Schedule of Cash Disbursements

Purchase of a new fixed asset involves cash outflow. Hence, it has be to entered on the Schedule of Cash Disbursements.

It is not a Cash receipts - option C is wrong.

It is capital expense and not revenue expense. Hence, it will not be entered on the Income statement, only depreciation on fixed asset should be entered on the income statement and not purchase of fixed asset. Option A is also wrong.

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