D774 Intro to Business Accounting Exam with Questions and Solutions

D774 Intro to Business Accounting Exam with Questions and Solutions Orange Zest Cafe purchases $350 worth of produce from a local farmer, and the farmer grants the company the ability to pay its invoice in 30 days. In which section of the balance sheet would Orange Zest Cafe report the $350 owed to the local farmer? ANSWER Short-term liability A business purchases a building to operate as its new warehouse. Which type of asset did the company purchase? ANSWER Long-term tangible asset Yellow Leaf Bookstore's balance sheet shows only four items. What would yellow leaf bookstore report as its owner's equity balance in its balance sheet? Cash Balance of 30k Inventory of 12k Equipment of 12k Accounts payable of 16k ANSWER $36,000 which sales revenue transaction would be reported on the income statement today if a company is using the accrual basis of accounting? ANSWER records a $500 sales today with cash to be collected in 30 days. A company purchases a two-year insurance policy to protect its assets and operations. Which section of the cash flow statement would this transaction be reported in? ANSWER operating activities