A Piece of Wood Is Floating in a Bathtub

question 113

Multiple Choice

A piece of wood is floating in a bathtub. A second piece of wood sits on top of the first piece, and does not touch the water. If the top piece is taken off and placed in the water, what happens to the
Water level in the tub?

• A) It does not change.
• B) It goes up.
• C) It goes down.
• D) It cannot be determined without knowing the volumes of the two pieces of wood.

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Definitions:

Ledger

A comprehensive collection of a company's financial accounts, where all transaction data is recorded, including debits and credits.

Adjusting Entries

Journal entries made at the end of an accounting period to record revenues to the period they are earned and expenses to the period incurred.

Cost of Goods Sold

The expenses directly associated with the manufacturing of products a company sells, such as materials and labor.

Customer Returns

Goods or merchandise sent back to the retailer or manufacturer by the purchaser due to defects, dissatisfaction, or other reasons.