Which of the Following Is an Example of an Owner's

question 62

Multiple Choice

Which of the following is an example of an owner's equity?

• A) A customer pays $3000 for a piece of equipment.
• B) An owner pays $7000 for supplies and equipment.
• C) An individual starts a new business and puts up $5000 of their own money to get started.
• D) The owner is sued and $2000 is paid for retaining an attorney.

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Definitions:

Cash Dividend

A payment made by a company to its shareholders, usually in cash, out of its profits or reserves.

Bond Payable

A long-term debt instrument issued by corporations and governments, promising to pay the bondholder a specified sum of money at future dates.

Indirect Method

A method often used in cash flow statements to convert net income into net cash flow from operating activities by adjusting for non-cash transactions and changes in working capital.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, also known as net earnings or net profit.