Jimmy's Repair Shop Started the Year with Total Assets of $300,000

question 144

Multiple Choice

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000.The net income reported by Jimmy's Repair Shop for the year was

• A)$240,000.
• B)$300,000.
• C)$180,000.
• D)$570,000.

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Definitions:

Merchandise

Goods bought and sold by businesses in the course of their trade; often refers specifically to products sold by retail businesses.

Discount Period

The discount period is the time frame during which a payment can be made with a discount for early payment according to the terms of a sales agreement.

Operating Expenses

Costs associated with running a business’s core operations on a daily basis, such as rent, utilities, and payroll, excluding the cost of goods sold.

Net Income

Net income, also known as net profit, is the amount of earnings that remain after deducting all costs and expenses from total revenue.