Scott's Camera Shop Started the Year with Total Assets of $80,000

question 44

Multiple Choice

Scott's Camera Shop started the year with total assets of $80,000 and total liabilities of $40,000. During the year, the business earned revenues of $120,000 and incurred expenses of $70,000. Scott made no additional capital contributions during the year, but did make withdrawals of $60,000. What is the amount of owner's equity at the end of the year?

• A)$70,000
• B)$120,000
• C)$30,000
• D)$60,000

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Definitions:

Income

Income earned, particularly when it's consistent, from work or investment returns.

Efficient Allocation

An economic condition where resources are distributed in a way that maximizes the welfare of society, ensuring that every good or service is produced up to the point where the last unit provides a benefit equal to the cost of producing it.

Risk

Uncertainty about future outcomes.

Risk-Averse

A description of an individual or organization that prefers to avoid uncertainty and is willing to sacrifice some potential gain to avoid risk.