Jim Left His Previous Job as a Sales Manager and Started

question 67

Multiple Choice

Jim left his previous job as a sales manager and started his own sales consulting business. He previously earned $70,000 per year, but he now pays himself $25,000 per year while he is building the new business. What is the economic cost of the time he contributes to the new business?

• A) $25,000 per year
• B) Zero
• C) $70,000 per year
• D) $45,000 per year

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Definitions:

Reference Column

An additional column in financial documents used to include explanatory notes or cross-references.

Manual Accounting Systems

Traditional methods of maintaining financial records and calculations by hand or using basic software, without automated processes.

Electronic Systems

Integrated assemblies of electronic components and circuits designed to perform a specific function or a range of functions.

Journal

An accounting record in which transactions are initially recorded in chronological order.