Crue Company Had the Following Transactions During 2015

question 53

Multiple Choice

Crue Company had the following transactions during 2015:
-Sales of $4,800 on account
-Collected $2,000 for services to be performed in 2016
-Paid $1,625 cash in salaries
-Purchased airline tickets for $250 in December for a trip to take place in 2016
What is Crue's 2015 net income using accrual accounting?

• A)$2,925.
• B)$3,175.
• C)$4,925.
• D)$5,175.

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Definitions:

Lower of Cost

A principle that dictates inventory and other assets are recorded at the lesser of their historical cost or market value.

Generally Accepted Accounting Principles

A set of widely adhered to accounting principles and standards used in financial reporting.

Fair Value Accounting

An accounting approach where assets and liabilities are recorded at their current market value.

Assets and Liabilities

The resources owned by a company (assets) that provide future economic benefits and the obligations (liabilities) it owes to other entities.