After All the Account Balances Have Been Extended to the Balance

question 42

Multiple Choice

After all the account balances have been extended to the balance sheet columns of the worksheet, the totals of the debit and credit columns are $35,350 and $38,750, respectively. It can be concluded the company has a:

• A)net income of $3,400.
• B)net loss of $3,400.
• C)$74,100 net loss.
• D)$74,100 net income.

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Definitions:

Deferred Compensation

A portion of an employee's income that is deferred to a later date, typically to take advantage of lower tax rates or to fund retirement plans.

Pension Expense

The cost recognized by an employer for providing retirement benefits to employees during a given period.

Straight-Line Method

A depreciation technique that allocates an equal amount of the cost of an asset minus its salvage value to each accounting period over its useful life.