The Following Accounts Were Taken from the Adjusted Trial Balance

question 62

Multiple Choice

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:? $$\begin{array} { l r } \text { Accumulated Depreciation } & \$ 3,200 \\\text { Fees Earned } & 17,400 \\\text { Depreciation Expense } & 1,300 \\\text { Insurance Expense } & 400 \\\text { Prepaid Insurance } & 4,800 \\\text { Supplies } & 900 \\\text { Supplies Expense } & 3,800\end{array}$$ Net income for the period is

• A) $5,500
• B) $11,900
• C) $17,400
• D) $8,700

---

Definitions:

Replacement Cost

The current cost of replacing an asset with a new one of similar kind and quality.

Ending Inventory

The final valuation of goods available for sale at the conclusion of a reporting period, calculated using beginning inventory plus purchases minus cost of goods sold.

Lower Of Cost

A principle that requires inventory to be recorded at the lower of its historical cost or the market value.

Market Method

A valuation method that prices assets or liabilities based on current market prices or values.