The Following Entries Were Made by the Accountant of Patel

question 137

Essay

The following entries were made by the accountant of Patel Pastries during its first month of operation:
1).James Patel,the owner,deposited $3,000 in the business's new checking account.
2)Patel Pastries paid the first month's rent of $400 in cash.
3)Patel Pastries purchased equipment by signing a note payable of $11,000.
4)Cash sales for the month were $4,500.
5)Patel Pastries purchased cooking supplies for $1,400 cash.
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After the accountant posts these entries to the general ledger,what is the balance in the Cash account?
A) $7,500
B) $7,100
C) $5,700
D) $16,700

• A) $7,500
• B) $7,100
• C) $5,700
• D) $16,700

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Definitions:

Disguised Subsidy

Financial support given to industries or businesses in indirect ways, not easily identifiable as traditional subsidies, to lower their costs or increase their competitiveness.

Consumer Surplus

The gap between the total sum consumers are prepared and financially able to spend on a good or service and the sum they actually spend.

Legal

Pertaining to or conforming to the laws of a country or the legality of a situation or activity.

Efficient Output Level

The quantity of output at which a firm's average total cost is minimized.