Your New Firm Is Operating in an All-Cash Environment Without

question 14

Multiple Choice

Your new firm is operating in an all-cash environment without taxes.You sold $1,000 of inventory for three times the amount you paid for it.The accounting entries you would make for this transaction are:

• A)$1000 increase in cash,$1,000 decrease in inventory.
• B)$2,000 increase in cash.
• C)$3,000 increase in cash,$1,000 decrease in inventory,$2,000 increase in accounts receivable.
• D)$3,000 increase in cash,$1,000 decrease in inventory,$2,000 increase in retained earnings.

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Definitions:

Securities Offerings

The process of issuing new securities for sale to investors, typically to raise capital for a corporation or government entity.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the securities industry and stock and options exchanges.

Letter of Comments

A document often issued by auditors or regulatory bodies outlining concerns, observations, or requests for clarification on specific points in a financial report or audit.

SEC

The United States Securities and Exchange Commission is a federal body tasked with the enforcement of federal securities legislation and the regulation of the securities sector.