Tom and Jerry Have Two Tasks to Do All Day

question 48

Multiple Choice

Tom and Jerry have two tasks to do all day: set traps and build bombs.If Tom spends all day setting traps,he will have set 16 traps.If he instead devotes his day to building bombs,Tom will build 4 bombs.If Jerry spends his day setting traps,he will set 14 traps;if he spends the day building bombs,he will build 7 bombs.For Jerry,the opportunity cost of building a bomb is ________ traps set.

• A)14
• B)7
• C)4
• D)2

Evaluate the effect of transactions on a company's current ratio.

Distinguish between transactions that affect current and total assets.

Understand the concept of dividends and their impact on retained earnings.

Identify transactions involving external exchanges.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand for making minor payments.

Valid Receipts

Documents that serve as proof of a transaction, showing essentials like the date, items purchased or services rendered, and the amount paid.

Debit Memo

A document issued to adjust downwards the amount of money owed to a business by a customer or another business.

Journal Entries

Entries made in a journal documenting every financial transaction of a business and used as the first step in the accounting cycle.