Mary Martin, the Owner of Martin Consulting, Started the Business $$\begin{array} { | l | r | l | } \hline \text { Investments } & 40,000 & \\\hline \text { M. Martin, Capital } & & 40,000 \\\hline\end{array}$$

question 131

Multiple Choice

Mary Martin, the owner of Martin Consulting, started the business by investing $40,000 cash. Identify the general journal entry below that Martin Consulting will make to record the transaction.

• A) \[\begin{array} { | l | r | l | }
• \hline \text { Investments } & 40,000 & \\
• \hline \text { M. Martin, Capital } & & 40,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | l | }
• \hline \text { Cash } & 40,000 & \\
• \hline \text { M. Martin, Capital } & & 40,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { M. Martin, Capital } & 40,000 & \\
• \hline \text { Cash } & & 40,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Investments } & 40,000 & \\
• \hline \text { Cash } & & 40,000 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 40,000 & \\
• \hline \text { Increased Equity } & & 40,000 \\
• \hline
• \end{array}\]

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Definitions:

Fixed Cost

Costs that do not change with the level of output or production, such as rent, salaries, and insurance.

Market Price

The actual selling price of a good or service in the marketplace at any given time.

Marginal Revenue

The increase in income a business achieves through the sale of one extra unit of a product or service.

Marginal Cost

The extra charge involved in producing an additional unit of a product or service.