Sarah and Jason Are Married and Live in a Community

question 79

Multiple Choice

Sarah and Jason are married and live in a community property state.Sarah is a nurse and earns $40,000 per year; Jason is an engineer and earns $75,000 per year.They have a joint bank account that earned $500 in interest and Jason recently invested in some stocks that paid a $2,000 dividend.If Sarah and Jason file separate returns, how much income would Sarah report?

• A)$40,000
• B)$41,000
• C)$57,750
• D)$58,750

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate periods.

Accrued Fees

Charges that have been incurred but not yet paid or recorded at the end of a reporting period, representing liabilities on the balance sheet.

Earned

Earned typically refers to income or revenue that has been generated from businesses activities or investments and is recognized upon the delivery of goods or services.

Clients

Individuals or entities that receive services or products from a business in exchange for payment.