Grizzly Co. enters into the following transactions: Stockholders contribute $11,500 cash to a company in exchange for common stock. The company purchases $5,750 of new equipment in exchange for its promise to pay $5,750 at the end of next month. The company pays $3,150 to suppliers on account. Required: Show the effect of these transactions on the basic accounting equation. Prepare the journal entries that would be used to record the transactions.

Peppy knows a lot about marketing, but not much about the legal or financial aspects of starting a new business. he wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting peppy's pizzazzeria up and running. peppy should: trust his basic instincts and try to put it together without the advice of lawyers and accountants. delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year. immediately hire full-time lawyers and accountants for his staff. consult with a lawyer and accountant even though the budget is tight.

Fractional reserve banking which of the following statements about fractional reserve banking are correct? check all that apply. fractional reserve banking allows banks to create money through the lending process. fractional reserve banking does not allow banks to hold excess reserves. fractional reserve banking allows banks to create additional wealth by lending some reserves. fractional reserve banking relies on everyone not withdrawing their money at the same time.

As a general rule, when accountants calculate profit they account for explicit costs but usually ignorea. certain outlays of money by the firm. b. implicit costs. c. operating costs. d. fixed costs.