Wang Company Had the Following Transactions During 2013

question 18

Multiple Choice

Wang Company had the following transactions during 2013:
-Sales of $10,800 on account
-Collected $4,800 for services to be performed in 2014
-Paid $3,100 cash in salaries
-Purchased airline tickets for $600 in December for a trip to take place in 2014
What is Wang's 2013 net income using cash basis accounting?

• A) $1,100
• B) $2,300
• C) $12,500
• D) $1,700

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Definitions:

Aquifer

A body of permeable rock that can contain or transmit groundwater.

Groundwater Flow

The movement of water through the subsurface soil and rocks, primarily driven by gravity and pressure differences.

Permeability

Permeability is a measure of the ability of a porous material (such as rock or soil) to allow fluids to pass through it.

Perched Water

Groundwater that sits above the main water table and generally is underlain by a layer or lens of impermeable rock that blocks the downward flow of groundwater.