At the end of the current accounting period, account balances were as follows: Cash, $15,000; Accounts Receivable, $20,000; Common Stock, $8,000; Retained Earnings, $14,000. Liabilities for the period were:
A) $13,000.
B) $20,000.
C) $27,000.
D) $32,000.

Question

Quizplus · Accepted Answer

To find the liabilities, we need to calculate the total assets first. Total assets = Cash + Accounts Receivable = $15,000 + $20,000 = $35,000.

Now, we can use the accounting equation: Assets = Liabilities + Owner's Equity.

Rearranging the equation, we get: Liabilities = Assets - Owner's Equity.

Substituting the values, we get:

Liabilities = $35,000 - ($8,000 + $14,000)

Liabilities = $35,000 - $22,000

Liabilities = $13,000

Therefore, the correct answer is A) $13,000.

At the End of the Current Accounting Period, Account Balances