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La More Company Had the Following Transactions During 2021

question 135

Multiple Choice

La More Company had the following transactions during 2021.
-Sales of $9,000 on account
-Collected $4,000 for services to be performed in 2022
-Paid $2,650 cash in salaries
-Purchased airline tickets for $500 in December for a trip to take place in 2022
What is La More's 2021 net income using cash basis accounting?


Definitions:

External Failure Costs

Costs incurred when a customer receives a defective product.

Appraisal Costs

Costs related to identifying defective units before they are shipped to customers.

Optimum Quality Level

The level of quality at which the total cost associated with quality management (including prevention, appraisal, and failure) is minimized.

Balanced Scorecard

A set of performance measures that provide a comprehensive view of the organization by recognizing the goals of shareholders, the satisfaction of customers and employees, and methods to improve the firms internal processes.

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