A Business Ended the Year with a Cash Balance of $40

question 81

Multiple Choice

A business ended the year with a cash balance of $40 000. During the year, the following transactions took place: Assuming no other transactions took place, the cash at the beginning of the year was:

• A) $45 000.
• B) $48 000.
• C) $46 500.
• D) $35 000.

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Definitions:

Impairment

A decrease in the recoverable value of an asset below its carrying amount, leading to a write-down and charge against earnings.

Consolidating

The process of combining financial statements from multiple departments or subsidiaries within a company to create a single set of financial statements.

Equity Method

A procedure for accounting for ownership interests, where the investment's carrying amount is adjusted for the investor's proportionate share of the associate company's profits or losses over time.

Investment Account

An account held at a financial institution that holds investments such as stocks, bonds, mutual funds, and other assets for the investor.