If total liabilities increased by $15,000 and owner’s equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?   a. $20,000 decrease b. $20,000 increase c. $25,000 increase d. $30,000 increase

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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If total liabilities increased by $15,000 and owner’s equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?  

a. $20,000 decrease

b. $20,000 increase

c. $25,000 increase

d. $30,000 increase

Business documents are examined to determine the effects of transactions on the accounts.

a. Analyze each transaction

b. Enter each transaction in a journal

c. Transfer journal information to ledger accounts.

This step is called journalizing

a. Analyze each transaction

b. Enter each transaction in a journal

c. Transfer journal information to ledger accounts.

Jimmy's Car Repair Shop started the year with total assets of $270,000 and total liabilities of $180,000. During the year, the business recorded $450,000 in car repair revenues, $255,000 in expenses, and Jimmy withdrew $45,000. The net income reported by Jimmy's Car Repair Shop for the year was

a.$150,000.

b.$195,000.

c.$90,000

d.$405,000

 

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