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Lexington Company Engaged in the Following Transactions During Year 1

question 182

Multiple Choice

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $3,600 cash from issuing common stock.2) Borrowed $2,500 from a bank.3) Earned $3,400 of revenues.4) Incurred $2,460 in expenses.5) Paid dividends of $460.Lexington Company engaged in the following transactions during Year 2:1) Acquired an additional $800 cash from the issue of common stock.2) Repaid $1,510 of its debt to the bank.3) Earned revenues, $4,800.4) Incurred expenses of $2,870.5) Paid dividends of $1,000. The amount of total assets on Lexington's balance sheet at the end of Year 1 was:

Understand the impact of transactions on owner's equity and company financial position.

Comprehend the basic accounting equation and how transactions affect it.

Master the calculation of net income or net loss from given financial data.

Identify internal and external users of accounting information and their needs.

Definitions:

Null Hypothesis

A hypothesis that states there is no effect or no difference, and it serves as the default assumption to be tested in hypothesis testing.

Difference Score

The result of subtracting one quantity from another, often used to measure change or effects in experimental designs.

T-test

A statistical test used to determine if there is a significant difference between the means of two groups, which may be related in certain features.

Critical Value

A threshold value in statistical testing used to determine whether to reject the null hypothesis.