Gary Company Reports a $15,000 Increase in Inventory and a $5,000

question 106

Multiple Choice

Gary Company reports a $15,000 increase in inventory and a $5,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $180,000. The cash payments made to suppliers were

• A) $180,000.
• B) $190,000.
• C) $160,000.
• D) $175,000.

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Definitions:

Total Capital

The sum of a company's debt and equity, representing the total funds available for the business to use.

Partners' Equity

The owners' claim or interest in the assets of a partnership, after all liabilities have been subtracted.

Capital Account

An account used in economics and finance to track the net changes in a nation's assets and liabilities or a company's equity provided by shareholders and retained earnings.

Loss On Realization

The financial loss recognized when assets are sold for less than their carrying amount during the liquidation of a company.