1. Jane is an osteopath operating as a sole proprietor. In January she purchases some new furniture costing $12 500 for her waiting room. The purchase is made on credit. The effect of this transaction on the accounting equation is:

Select one:

a. Increase in the asset furniture $12 500 decrease in the asset accounts receivable $12 500

b. Increase in the asset furniture $12 500 increase in the asset accounts receivable $12 500

c. Increase in the asset furniture $12 500 increase in equity $12 500

d. Increase in the asset furniture $12 500 increase in the liability accounts payable $12 500

2. Junction Plants had the following transactions during August. Which transaction represents an expense for August under the accrual basis of accounting?

Select one:

a. Purchased a computer for $3000 cash

b. Paid a service station $500 for repair work performed on its delivery truck in June

c. Purchased $30 of petrol on credit for the delivery truck. The account will be paid during September

d. Paid $3300 in settlement of a loan obtained three months earlier

3.

During 2020 The Style Hairdressing Salon paid out $41 000 in wages from its bank account. At year-end 2020 wages owing but unpaid were $2 400. The salon uses accrual accounting. How much would be reported as wages expense for 2020?

Select one:

a. $38 600

b. $43 400

c. $42 600

d. $41 000