Receiving Cash for Fees Earned Affects Which Financial Statement Elements

question 16

Multiple Choice

Receiving cash for fees earned affects which financial statement elements?

• A)Assets only
• B)Stockholders' equity only
• C)Assets and stockholders' equity
• D)Assets and liabilities

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Definitions:

Lower Of Cost

Refers to the accounting principle of valuing and reporting assets at the lower of its historical cost or the market value.

Original Cost

The purchase price of an asset or service, including installation fees, transportation costs, and other expenses required to bring an asset into a usable state.

Investment Account

A financial account held at a financial institution that contains securities, cash, and other assets managed for the purpose of investment.

Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profit from operations before interest expenses and taxes have been deducted.