Pat, Age 12, Received the Following Income in 2012 $$\begin{array} { l r } \text { Dividends } & \$ 2,900 \\\text { Interest } & 1,900 \\\text { Wages } & 500\end{array}$$

question 58

Multiple Choice

Pat, age 12, received the following income in 2012: $$\begin{array} { l r } \text { Dividends } & \$ 2,900 \\\text { Interest } & 1,900 \\\text { Wages } & 500\end{array}$$ She deposited all her income in a savings account.Pat is a U.S.citizen and lives with her parents, who provide the full $13,000 annual cost of her support.Which statement is false?

• A)Pat's parents may claim her as a dependent.
• B)Pat has net unearned income of $2,900.
• C)Pat has taxable income of $4,350.
• D)Pat's standard deduction is $800.

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Definitions:

Merchandise Inventory

Items that a company holds for the purpose of resale to customers in the ordinary course of business.

Gross Method

An accounting approach for recording purchases at the invoice price without deduction of any cash discounts offered.

Perpetual Inventory System

A strategy for managing inventory accounting that utilizes computerized point-of-sale systems and enterprise asset management software to immediately document sales or purchases.

Accounts Payable

Obligations a business has to its creditors, arising from the purchase of goods and services on credit.