During Its First Year of Operations,a Company Entered into the Following

question 78

Multiple Choice

During its first year of operations,a company entered into the following transactions: Borrowed $20,000 from the bank by signing a promissory note.
Issued stock to owners for $40,000.
Purchased $4,000 of supplies on account.
Paid $1,600 to suppliers as payment on account for the supplies purchased.
What is the amount of total liabilities at the end of the year?

• A)$24,000
• B)$62,400
• C)$64,000
• D)$22,400

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Definitions:

Profit Center

A separate business unit or department within an organization that is responsible for generating its own revenue and profits.

Direct Expenses

Expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor costs.

Sole Benefit

A principle ensuring actions or decisions, especially in fiduciary contexts, are made with the exclusive advantage of the beneficiary in mind.

Department

A department refers to a distinct area, division, or branch of an organization with specific responsibilities and functions.