Imagine That We Put a Raisin Cake into the Oven

question 77

Multiple Choice

Imagine that we put a raisin cake into the oven, with each raisin separated from the others by 1 cm. An hour later, we take it out and the distances between raisins are 3 cm. If you lived in one of the raisins and watched the other raisins as the cake expanded, which of the following would you conclude?

• A) All raisins would be moving away from you at the same speed.
• B) More distant raisins would be moving away from you faster.
• C) More distant raisins would be moving away from you more slowly.
• D) It depends: If you lived in a raisin near the left side of the cake, you'd see other raisins moving away from you, but they'd be coming toward you if you lived in a raisin near the right side of the cake.

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Definitions:

Owner's Capital Account

An equity account on the balance sheet representing the total amount of investment made by the owner(s) in the company, including profits retained in the business.

Balance Sheet Accounts

These are the financial accounts that appear on the balance sheet, including assets, liabilities, and equity accounts, representing the financial position of a company at a specific point in time.

Permanent Accounts

Financial accounts whose balances are carried over into the next accounting period, including assets, liabilities, and equity accounts.

Real Accounts

Accounts that represent assets, liabilities, and equity, which are not closed at the end of the accounting period and carry over their balances.