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

question 102

Multiple Choice

During its first year of operations, a company entered into the following transactions:
-Borrowed $5,000 from the bank by signing a promissory note.
-Issued stock to owners for $10,000.
-Purchased $1,000 of supplies on account.
-Paid $400 to suppliers as payment on account for the supplies purchased.
-Use the information above to answer the following question.What is the amount of total liabilities at the end of the year?

• A) $6,000.
• B) $15,600.
• C) $16,000.
• D) $5,600.

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Definitions:

Innovation Theory

A concept in economics that attributes economic growth and development primarily to the introduction of new technologies and improvements in processes or products.

Under Consumption

A situation where consumers are spending less than what is needed to drive economic growth due to various factors like low income or high savings.

Sunspot Theory

A theory in economics that suggests that economic cycles might be driven by psychological factors or extrinsic shocks, rather than fundamentals alone.

Psychological

Pertaining to the mind or mental processes, often emphasizing the influence on behavior, perception, and emotion.