Question 1 (2 points)

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At December 31, Year 1 the accounting records of Gordon, Incorporated contain the following items:

Accounts Payable	$ 2,500	Accounts Receivable	$ 18,750
Land	30,000	Cash	?
Building	31,250	Equipment	40,000
Notes Payable	?	Capital Stock	12,500
Retained Earnings	125,000

If the Cash balance at December 31, Year 1 is $62,500 then Total Liabilities amounts to:

Question 1 options:

	$42,500.
	$140,000.
	$45,000.
	$182,500.

Question 2 (2 points)

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Which of the following best describes liquidity?

Question 2 options:

	The ability to increase the value of retained earnings.
	The ability to pay the debts of the company as they become due.
	Being able to buy everything the company requires for cash.
	Purchasing everything the company requires on credit.

Question 3 (2 points)

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At the end of the current year, the owners' equity in Durante Company is $360,000. During the year, the assets of the business had increased by $68,000 and the liabilities had increased by $118,000. Owners' equity at the beginning of the year must have been:

Question 3 options:

	$410,000.
	$310,000.
	$546,000.
	$174,000.

Question 4 (2 points)

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Retained earnings is:

Question 4 options:

	The positive cash flows of a company.
	The net worth of a company.
	The owners' equity that has accumulated as a result of profitable operations.
	Equal to the total assets of a company.

Question 5 (2 points)

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Which of the following assets would most likely be listed last on a statement of financial position?

Question 5 options:

	Land.
	Cash.
	Accounts receivable.
	Equipment.