Ace Builders Had the Following Transactions in June: Earned $4,000

question 29

Multiple Choice

Ace Builders had the following transactions in June: Earned $4,000 "on account;" collected $3,000 from a customer that was owed from a previous month; incurred $500 of repair expense and paid cash to the repairman; paid $1,200 to a supplier that it owed from the previous month; paid out $800 in cash drawings to the owner.
-What is the combined effect on Owner's capital of the June transactions?

• A) Down $2,700
• B) Down $5,700
• C) Up $2,700
• D) Down $4,500

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Definitions:

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to negative outcomes for society.

Income Inequality

The uneven distribution of income within a population, leading to disparities in wealth and economic opportunities.

Private-Sector Risk

The exposure to uncertainty and potential financial loss faced by businesses and investors outside of government control.

Contracts

Legal agreements between two or more parties that create mutual obligations enforceable by law.