Rusthe Company Showed the Following Balances at the End of Its

question 16

Multiple Choice

Rusthe Company showed the following balances at the end of its first year: $$\begin{array} { l r } \text { Cash } & \$ 14,000 \\\text { Prepaid insurance } & 1,400 \\\text { Accounts receivable } & 7,000 \\\text { Accounts payable } & 5,600 \\\text { Notes payable } & 8,400 \\\text { Share capital-ordinary } & 2,800 \\\text { Dividends } & 1,400 \\\text { Revenues } & 42,000 \\\text { Expenses } & 35,000\end{array}$$ What did Rusthe Company show as total credits on its trial balance?

• A)$60,200
• B)$58,800
• C)$57,400
• D)$61,600

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Definitions:

Risk-free Asset

An investment that is assumed to have no risk of financial loss, typically represented by government bonds.

Beta

A measure of a stock's volatility in relation to the stock market as a whole, indicating the risk associated with investing in a particular stock.

CAPM

The Capital Asset Pricing Model, a formula that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Expected Return

The anticipated or forecasted return on an investment based on historical or projected performance data.