Consider the Following Transactions

question 59

Multiple Choice

Consider the following transactions:
(i) issued share capital for cash of $250 000
(ii) received $50 000 from accounts receivable
(iii) paid $30 000 to accounts payable
(iv) purchased new equipment for $160 000 on credit
Total assets increased by:

• A) $220 000.
• B) $230 000.
• C) $380 000.
• D) $430 000.

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Definitions:

Obligation

A duty or commitment to fulfill an agreement, such as repaying a loan or delivering goods or services as contracted.

Liability

A financial obligation or debt that a company or individual owes to another entity.

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from net sales, representing the profit made before deducting operating expenses.

Cost of Goods Sold

The immediate expenses linked to the creation of products a business sells, comprising both material costs and labor charges.