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

question 17

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.If this was the only transaction,which of the following would most closely match the entries on your income statement?

• A)Revenues = $1,000,expenses = $1,000,profit = $0
• B)Cash increases by $3,000,inventory decreases by $1,000,and retained earnings increases by $2,000.
• C)Revenues = $3,000,expenses = $0,profit = $3,000
• D)Revenues = $3,000,expenses = $1,000,profit = $2,000

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Definitions:

Purity

The state of being free from contaminants, adulterants, or imperfections; often used in moral or ethical contexts.

Amplitude

A measure of the intensity or strength of a wave signal, depicted as the height of the wave from its equilibrium.

Complexity

A characteristic of a system or model that has multiple components which interact in varied and intricate ways.

Saccades

Rapid and simultaneous movements of the eye that adjust the focus of gaze from one point to another.