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In each blank next to the following terms, place the identifying letter of its best description.

_______ 1. Cost centerA. Incurs costs without directly yielding revenues_______ 2. Investment centerB. Provides information used to evaluate the performance of a department._______ 3. Departmental accounting systemC. Holds manager responsible for revenues, costs, and investments._______ 4. Operating departmentD. Engages directly in manufacturing or in making sales directly to customers._______ 5. Profit centerE. Does not directly manufacture products but contributes to profitability of the entire company_______ 6. Responsibility accounting systemF. Incurs costs and also generates revenues._______ 7. Service departmentG. Provides information used to evaluate the performance of a department manager.\begin{matrix} \text{\_\_\_\_\_\_\_ 1. Cost center} & \text{A. Incurs costs without directly yielding revenues}\\ \text{\_\_\_\_\_\_\_ 2. Investment center} & \text{B. Provides information used to evaluate the performance of a department.}\\ \text{\_\_\_\_\_\_\_ 3. Departmental accounting system} & \text{C. Holds manager responsible for revenues, costs, and investments.}\\ \text{\_\_\_\_\_\_\_ 4. Operating department} & \text{D. Engages directly in manufacturing or in making sales directly to customers.}\\ \text{\_\_\_\_\_\_\_ 5. Profit center} & \text{E. Does not directly manufacture products but contributes to profitability of the entire company}\\ \text{\_\_\_\_\_\_\_ 6. Responsibility accounting system} & \text{F. Incurs costs and also generates revenues.}\\ \text{\_\_\_\_\_\_\_ 7. Service department} & \text{G. Provides information used to evaluate the performance of a department manager.}\\ \end{matrix}


Answer the following questions. Hint: Use the accounting equation.

a. On January 11, Lumia Company’s liabilities are $60,000\$60,000 and its equity is $40,000\$40,000. On January 33, Lumia purchases and installs solar panel assets costing $10,000\$10,000. For the panels, Lumia pays $4,000\$4,000 cash and promises to pay the remaining $6,000\$6,000 in six months. What is the total of Lumia’s assets after the solar panel purchase?


Answered 1 year ago
Answered 1 year ago
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In this exercise, we are to use the accounting equation in order to answer the following items relating to assets, liabilities, and equity.

For this particular item, we will be calculating the company’s total assets after the purchase of the solar panels.

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