Given Below Is a Balance Sheet of Incrad Clothes,a Partnership

question 57

Multiple Choice

Given below is a balance sheet of Incrad Clothes,a partnership firm,as at 30 June 2017.

With regard to the above table,which of the following statements is true?

• A) Brad and Chad have limited liabilities for the partnership's debts because it is a limited liability company.
• B) The bank loan of $26,000 is part of the partners' equity.
• C) The computer was purchased at a cost less than $14,000.
• D) The current market value of the furniture is $10,000.

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Definitions:

Cash Flow

The complete financial movement into and out of a corporation, especially regarding its liquidity.

Equivalent Annual Annuity

A calculation used to compare the returns of investments with different payment schedules by converting them into an equivalent sum received at regular annual intervals.

Cost Of Capital

The minimum rate of return that a business must earn before generating value, representing the opportunity cost of investing resources in a specific company instead of elsewhere.

Cash Flow

The aggregate amount of cash and similar liquid assets flowing into and away from a business entity.