1. ABC Inc. has total assets of $45,000. What are the total assets if new equipment is purchased for $5,000 cash?
A. $45,000
B. $50,000
C. $55,000
D. $60,000
2. The net income or net loss is calculated on the:
A. balance sheet.
B. statement of owner’s equity.
C. income statement.
D. annual profit report.
3. Julie billed her legal clients $5,000 for legal work completed during the month. This transaction will:
A. cause a $5,000 increase in cash and revenues.
B. cause a $5,000 increase in cash and owners equity.
C. cause a $5,000 increase in assets and revenues.
D. not be recorded until the cash is collected.