A Company Started the Year with a Normal Balance of $68,000

question 26

Multiple Choice

A company started the year with a normal balance of $68,000 in the Inventory account.During the year,debits totaling $45,000 and credits totaling $55,000 were posted to the Inventory account.Which of the following statements about the Inventory account is correct?

• A) The normal balance of the Inventory account is a credit balance.
• B) After these amounts are posted, the balance in the Inventory account is a credit balance of $58,000.
• C) The Inventory account is decreased by debits.
• D) The debits and credits posted to the Inventory account caused it to decrease by $10,000.

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Definitions:

Cash Flow

The total net flow of cash transactions in and out of an enterprise, deeply affecting its liquidity quotient.

Stockholders

Individuals or entities that own shares in a corporation, giving them partial ownership and potentially a claim on its profits.

Millions

A numerical value representing one thousand thousands, or 1,000,000.

Cash Flow

The total amount of money being transferred into and out of a business, often used as an indicator of financial health.