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:

Statement of Cash Flows

A report detailing the impact of variations in balance sheet items and revenue on cash and equivalents, segmented by operating, investing, and financing activities.

Sources and Uses of Cash

A financial statement or section that summarizes where a company's cash comes from (sources) and where it is spent (uses), providing insight into its financial health.

Assets and Liabilities

Assets are resources owned by a company that have economic value, while liabilities are the company's legal debts or obligations.

Income and Expenses

Refers to the money received (income) and the costs incurred (expenses) by an individual or business, which determine the net profit or loss.