A company purchases inventory on credit.

Which answer best describes how this transaction would be reflected in the company's balance sheet?

Select one:

Cash increases and liabilities increase

Retained earnings increase and cash increases

No change in the balance sheet

Inventory increases and accounts payable increases

Inventory which originally cost 80.0 is sold for 100.0 in cash.

2 . Which answer best describes how this transaction would be reflected in the company's balance sheet?

Select one:

Retained earnings decreases 80.0, inventory decreases 80.0, retained earnings increases 100.0, accounts receivable increases 100.0

Inventory decreases 80.0, cash increases 100.0, retained earnings increases 20.0

Inventory decreases 80.0, sales increase 100.0, cash increases 100.0, accounts payable decreases 80.0

Cash increases 20.0, sales increases 100.0, inventory decreases 80.0

Which answer best describes how debt issuance would be reflected in the company's balance sheet?

Select one:

Debt increases, common stock increases

Debt increases, cash decreases

Debt increases, cash increases

Debt increases, interest expense increases

Which of the following best describes retained earnings?

Select one:

Provides a description of sources of funding and uses of funding, at a point in time

Shows in and out flows of cash from the company during a period

Total assets less net liabilities equals equity

Records level of reinvested profits

Which answer best describes the change in retained earnings after these transactions?

Cash sale of inventory from storeroom	100.0
Cash sales (in the line above) originally cost	40.0
Credit sale of inventory from storeroom	95.0
Cost of credit sale above	35.0
Cash purchase of machinery (no depreciation)	70.0
Water bill received and paid	20.0
Wages for the period paid in cash	50.0
Shareholders inject capital	10.0

Select one:

125.0

(20.0)

60.0

50.0