What Is the James Long Company's Net Income or Net

question 50

Multiple Choice

What is the James Long Company's net income or net loss if it had revenue of $1,200, salary expense of $300, utility expense of $500, and withdrawals of $500 during May?

• A) $400
• B) ($100)
• C) $100
• D) $900

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Definitions:

Bad Debts Expense

The cost recognized when a company determines that a customer's loan or receivable account is uncollectible.

Allowance Method

An accounting technique used to estimate and adjust accounts receivable for amounts that are unlikely to be collected.

Carrying Value

The value of an asset as shown on the balance sheet, representing its original cost minus any accumulated depreciation, impairment, or amortization.

Allowance Method

A technique used in accounting to estimate and account for bad debts by recognizing them as an expense before the debts actually become uncollectible.