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

question 105

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. Total expenses for the year were:

• A)$5,300.
• B)$7,700.
• C)$7,800.
• D)$6,900.

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Definitions:

Discounted Payback

A method in capital budgeting that determines the amount of time needed to recover the initial investment, accounting for the present value.

Payback Method

An approach within capital budgeting that determines how long it takes to regain the initial outlay for an investment.

Mutually Exclusive

This term describes options or decisions that cannot occur simultaneously; choosing one means forgoing the others.

Required Rate

The minimum percentage return that an investment must yield to be considered acceptable. It is essentially another term for the required return on investment, critical for financial planning and analysis.