Tatum Company Had an Increase in Inventory of $40,000

question 184

Multiple Choice

Tatum Company had an increase in inventory of $40,000. The cost of goods sold was $80,000. There was a $5,000 decrease in accounts payable from the prior period. What were Tatum's cash payments to suppliers?

• A) $125,000
• B) $75,000
• C) $115,000
• D) $85,000

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Definitions:

M1

A category of the money supply that includes all physical money like coins and currency, as well as demand deposits and other liquid assets held by the central bank.

Double Coincidence of Wants

A condition in barter economies where two parties each hold an item the other wants, making it possible for an exchange to occur without a common medium of exchange.

Barter Situation

A trade system where goods or services are exchanged directly for other goods or services without the use of money as a medium of exchange.

Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type.