The Diamond Store Began Business on June 1

question 67

Multiple Choice

The Diamond Store began business on June 1. During the month of June, it had cash payments of $9,000.At the end of June, it had a $14,000 balance in cash. Based on this information, the cash receipts for the month of June:

• A) were $5,000.
• B) were $16,000.
• C) were $23,000.
• D) cannot be determined.

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Definitions:

Accounting Equation

The fundamental formula in accounting that represents the relationship between an entity's assets, liabilities, and equity (Assets = Liabilities + Equity).

Liabilities

Financial obligations or debts that a company owes to others, payable in money, goods, or services.

Owner's Equity

Represents the owner’s claims on the assets of a business, calculated as the business’s total assets minus its total liabilities.

Accounting Equation

The fundamental equation of double-entry bookkeeping, reflecting that assets equal liabilities plus owner's equity.