MBA 629
Accounting and Financial Management
Agenda for Class 2 June 9, 2006
Review of chapter 1 and questions
Practice quiz questions:
1. The Melville Company sold land for $60,000 in cash. The land was originally purchased for $40,000, and at the time of the sale, $15,000 was still owed to First National Bank on that purchase. After the sale, The Melville Company paid off the loan to First National Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?
a. assets increase $20,000; liabilities decrease $15,000; owner's equity increases $5,000
b. assets increase $5,000; liabilities decrease $15,000; owner's equity increases $20,000
c. assets increase $60,000; liabilities decrease $15,000; owner's equity increases $20,000
d. assets increase $20,000; liabilities decrease $15,000; owner's equity increases $35,000
2. The total assets and the total liabilities of a business at the beginning and at the end of the year appear......
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Approximate Word Count: 481
Approximate Pages: 2 (260 words per double-spaced page) |