Stahl Consulting Started the Year with Total Assets of $60,000

question 70

Multiple Choice

Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The net income reported by Stahl Consulting for the year was:

• A) $3,000.
• B) $12,000.
• C) $18,000.
• D) $27,000.

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Definitions:

Management Report

A document that provides managers with information necessary to make decisions, including financial and operational data.

Accounting Period

A specific time span for which financial statements are prepared, commonly a quarter or a year.

Dividends Account

An account used in bookkeeping to track dividends declared by a company to be paid out to its shareholders.

Retained Earnings

The portion of net profits not distributed as dividends to shareholders but retained by the company for reinvestment or to pay off debt.