The Net Income Reported by Saira's Service Shop for the Year

question 41

Multiple Choice

The net income reported by Saira's Service Shop for the year was

• A) $200,000.
• B) $250,000.
• C) $150,000.
• D) $475,000.

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Definitions:

Merchantable Quality

Refers to the basic level of quality and functionality that consumers can reasonably expect from a specific good being sold.

Warranty

A guarantee, typically provided by a manufacturer or seller, assuring certain conditions or qualities of a product or service.

Security Interest

A legal claim on assets granted to a creditor to secure a loan, providing the creditor rights to the collateral if the debtor defaults.

Encumbrances

Legal claims or liens on a property or asset that may affect the title or restrict the owner's ability to use the property freely.