Table 1-1
Following Is a Random List Showing the Account

question 11

Multiple Choice

Table 1-1
Following is a random list showing the account balances of various assets, liabilities, revenues, and expenses for Spiffy's Garage at December 31, 2019, the end of its first year of operations. $\begin{array} { | l | r | } \hline \text { Accounts receivable } & \$ 15,000 \\\hline \text { Accounts payable } & 3,500 \\\hline \text { Salary expense } & 4,500 \\\hline \text { Repairs expense } & 800 \\\hline \text { Truck } & 8,500 \\\hline \text { Equipment } & 6,300 \\\hline \text { Notes payable } & 8,200 \\\hline \text { Cash } & 6,800 \\\hline \text { Supplies expense } & 1,600 \\\hline \text { Service revenue } & 12,800 \\\hline \text { Gasoline expense } & 800 \\\hline \text { Salary payable } & 2,200 \\\hline\end{array}$ The owner, Spiffy Sloan, invested $22,600 at the beginning of the year and withdrew $5,000 during the year for personal use.
-Refer to Table 1-1. Owner's equity at December 31, 2019, was:

• A)$13,900.
• B)$22,700.
• C)$22,600.
• D)$18,700.

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Definitions:

Process Cost System

An accounting method used to track cost related to processes or departments when mass-producing identical or similar products.

Work In Process Inventory

The value of partially completed goods or products that are in the process of being manufactured.

Perpetual Inventory System

The inventory system in which each purchase and sale of merchandise is recorded in the inventory account and related subsidiary ledger; therefore, the inventory records are updated continuously.

Conversion Cost

The combined cost of direct labor and manufacturing overheads which are incurred to convert raw materials into finished goods.