If a Company Receives $12,000 from the Stockholders to Establish

question 158

Multiple Choice

If a company receives $12,000 from the stockholders to establish a corporation, the effect on the accounting equation would be:

• A)Assets decrease $12,000 and equity decreases $12,000.
• B)Assets increase $12,000 and liabilities decrease $12,000.
• C)Assets increase $12,000 and liabilities increase $12,000.
• D)Liabilities increase $12,000 and equity decreases $12,000.
• E)Assets increase $12,000 and equity increases $12,000.

Understand and apply the direct write-off method for uncollectible accounts.

Recognize the expense recognition principle as it applies to bad debts and compare the direct write-off and allowance methods.

Analyze and interpret accounts receivable turnover to assess company performance.

Calculate accounts receivable turnover and understand its implication on company liquidity.

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Definitions:

Cultural Influences

The impact that a society’s values, beliefs, practices, and norms have on an individual’s behaviors, attitudes, and perspectives.

Snap Judgments

Quick decisions or opinions formed about someone or something, often based on limited information and potentially biased.

Meeting Etiquette

The set of rules and norms that govern behavior and conduct in professional meetings to ensure productive and respectful interactions.

Punctual

Being on time or completing tasks within the agreed timeframe.