Riley Incorporated Reports the Following Amounts at the End of the Year

question 4

Essay

Riley Incorporated reports the following amounts at the end of the year: $$\begin{array} { l r l r } \text { Cash } & \$ 3,200 & \text { Service Revenue } & \$ 92,500 \\\text { Buildings } & 60,000 & \text { Salaries Expense } & 72,800 \\\text { Accounts Payable } & 8,500 & \text { Equipment } & 72,000 \\\text { Interest Expense } & 4,000 & \text { Supplies } & 6,400 \\\text { Advertising Expense } & 11,300 & \text { Notes payable } & 40,000\end{array}$$

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and operational efficiency.

Accrual

The accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction happens.

Short-term Debt

Obligations and borrowings due to be paid within one year, critical for assessing a company's liquidity.

Disclosure Note

Supplementary information provided in financial statements, explaining the basis for certain accounting policies, detailing specific financial figure backgrounds.