The Following Transactions Occurred During July

question 18

Multiple Choice

The following transactions occurred during July:
1.Received $800 cash for services performed during July.
2.Received $5,000 cash from the issuance of common stock to owners.
3.Received $400 from a customer as payment for services performed during June.
4.Billed $3,500 to customers for services performed on account in July.
5.Borrowed $2,500 from the bank and signed a promissory note.
6.Received $1,000 from a customer for services to be performed during August.
-Use the information above to answer the following question.Which of the following statements about the recording of these transactions is correct?

• A) Transaction #1 would include a debit to Service Revenue.
• B) Transaction #3 would include a debit to Accounts Receivable.
• C) Transaction #4 would include a debit to Accounts Receivable.
• D) Transaction #6 would include a debit to Unearned Revenue.

Determine the significance of the accounts receivable turnover in managing receivables.

Calculate and interpret the times interest earned ratio to assess interest payment capacity.

Understand operating cycle calculations to manage cash flow effectively.

Evaluate the equity multiplier to understand the level of financial leverage.

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Definitions:

Limitations

Restrictions or caps, such as the time limits within which legal proceedings must be initiated.

Human Rights Legislation

Laws designed to protect individuals' fundamental rights and freedoms from infringement, often by the state or other individuals.

Businesspeople

Individuals who are involved in activities of commerce or trade, often owning or managing businesses.

Province

A territorial unit of administrative division within certain countries, often with its own local government.