Select the best answer for each of the questions and enter the letter of the ans

Question

Select the best answer for each of the questions and enter the letter of the answer you consider the most appropriate, in the space provided below. For example if "A" is the best answer for question 1, "A" will be entered in the space provided next to the #1. If more than one answer is required. There are no negative marks for wrong answers. A company purchases $25,000 of inventory in march 2008 and will for them in April 2015, which of the following statements is false? The company will report an accounts payable of $25,000 in march 2015. The statement of each flows will report in operating each outflow of $25,000 in April 2015. The income statement will report the $25,000 as cost of goods sold in March 2015 when they are purchased. None of the above is false. All of the above are false. The ending retained earnings balance of the Brown hat restaurant chain increased by $4.3 million from the beginning of the year. The company had declared a dividend of $1.5 million. What was the net income earned during the year? $2.8 million $3.0 million $4.3 million $5.8 million none of the above

Explanation / Answer

1. The inventory isn't sold yet, thus, cannot be included in cost of goods sold. Thus, the false statement is Option C.

2. Income earned during the year = 4.3 + 1.5 = $5.8 million Option D.

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