Linda Keller Opened a Consulting Firm, Keller Consulting P

question 32

Multiple Choice

Linda Keller opened a consulting firm, Keller Consulting P.C. During its first month of operations, the following transactions were completed: I. Linda invested $30,000 in the business, which in turn issued common stock to her.
II. The business purchased equipment on account for $63,000.
III. The business provided consulting services on account, $12,000.
IV. The business paid salaries to the receptionist, $2,000.
V. The business received cash from a customer as payment on account $6,000.
VI. The business borrowed $13,000 from the bank, issuing a note payable.
At the end of the month, total liabilities are:

• A)$13,000.
• B)$63,000.
• C)$76,000.
• D)$75,000.

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Definitions:

Income Statement

An income statement is a financial statement that shows a company's revenues and expenses over a specific period, highlighting net profit or loss.

Revenues

Revenue earned through the primary activities of a business, typically from selling products and services to its consumers.

Expenses

Outflows or other using up of assets or incurrence of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities.

Financial Reports

Periodic statements that provide information about a company's financial status, including balance sheets, income statements, and cash flow statements.