Per company policy, tools with a purchase price greater than $1,000 are capitalized Debit Tools Expenses $ 500, Credit Cash $ 500 is the correct entry to record a tool purchase of $500.
A company is a legal entity formed by a group of individuals to conduct and operate a commercial or industrial business. A company may be organized in various ways for tax and financial liability purposes, depending on the corporate law of its jurisdiction.
A legal entity is a type of legal entity structure that is a separate legal entity from its owner. This is a complex business structure, with additional reporting requirements and invalid legal obligations making it expensive to set up and manage.
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