Multiple choice

You invest $5,000, buy $1,000 in supplies on account, and $500 of prepaid insurance with cash.

  1. $6,000
  2. $6,500
  3. $1,500
  4. $5,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The question asks for the total investment/assets involved. The \$5,000 investment plus the \$1,000 in supplies on account equals $6,000. The $500 prepaid insurance is typically part of the asset base, but in this specific context, the total value of the initial investment and the supplies purchased is $6,000.