The Accountant for Scott Industries Prepared the Following List of Accounting

question 5

Essay

The accountant for Scott Industries prepared the following list of accounting equation element balances from the company's records for the year ended December 31:
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-Daniels Company is owned and operated by Thomas Daniels.The following selected transactions were completed by Daniels Company during May:1.Received cash from owner as additional investment,$55,000.2.Paid creditors on account,$7,000.3.Billed customers for services on account,$2,565.4.Received cash from customers on account,$8,450.5.Paid cash to owner for personal use,$2,500.6.Received the utility bill,$160,to be paid next month.​Note: Each transaction has two entries. ​

Identify changes in consumer utility with successive units of consumption.

Analyze the impact of changes in prices on the utility-maximizing combination of goods.

Interpret the significance of negative marginal utility.

Understand the budget line and how it represents all the combinations of goods a consumer can buy with a specific income.

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Definitions:

Direct Method

A way of presenting a cash flow statement where actual cash flows from operating activities are disclosed directly.

Operating Activities

Transactions and events related to the principal revenue-producing activities of an entity, reflected in its cash inflows and outflows.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement by starting with net income and adjusting for changes in non-cash items and operating capital.

Quality of Earnings

An assessment of the degree to which a company's earnings are derived from sustainable, core business activities.