Following Is a List of Account Balances (Except for Owner's

question 86

Multiple Choice

Following is a list of account balances (except for owner's capital) of Wilson Mowing Service as of December 31 of the first year of operation: $$\begin{array} { | l | r | } \hline \text { Accounts receivable } & \$ 2,500 \\\hline \text { Accounts payable } & 3,500 \\\hline \text { Salary expense } & 4,500 \\\hline \text { Repairs expense } & 800 \\\hline \text { Truck } & 8,500 \\\hline \text { Equipment } & 6,300 \\\hline \text { Notes payable } & 8,200 \\\hline \text { Cash } & 6,800 \\\hline \text { Supplies expense } & 1,600 \\\hline \text { Service revenue } & 31,900 \\\hline \text { Gasoline expense } & 3,800 \\\hline \text { Salary payable } & 200 \\\hline\end{array}$$
- The proprietor,J.D.Wilson,contributed $3,000 at the beginning of the year: during the year,the proprietor took $12,000 in drawings.
At the end of the year,what is the amount of total liabilities?

• A) $11,900
• B) $24,100
• C) $21,200
• D) $12,200

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Definitions:

Short-Run

A period of time during which at least one input, such as plant size, cannot be changed; contrasts with the long-run where all inputs are variable.

Marginal Cost

Marginal cost is the additional cost incurred from producing one extra unit of a good or service, an important concept in economics for determining optimal production levels.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output, a key factor in pricing and profitability analyses.

Marginal Revenue

The additional income generated from selling one more unit of a product or service.