Nuyen Services Company Records the Payment of $500 Cash for a Previously

question 96

Multiple Choice

Nuyen Services Company records the payment of $500 cash for a previously accrued expense and the accrual of $325 for another expense. The impact of these two entries on total expenses and net income is:

• A) \[\begin{array} { | l | l | }
• \hline \text { Total Expenses } & \text { Net Income } \\
• \hline \text { increase by } \$ 825 & \text { decrease by } \$ 325 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline \text { Total Expenses } & \text { Net Income } \\
• \hline \text { increase by } \$ 825 & \text { decrease by } \$ 825 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline \text { Total Expenses } & \text { Net Income } \\
• \hline \text { increase by } \$ 325 & \text { decrease by } \$ 325 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline \text { Total Expenses } & \text { Net Income } \\
• \hline \text { increase by } \$ 325 & \text { decrease by } \$ 825 \\
• \hline
• \end{array}\]

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Definitions:

Same Industry

Refers to businesses operating within the same sector or category, often subject to similar market conditions and regulations.

Major Product Category

A broad classification that represents a significant portion of a company’s offerings, organizing products or services by common attributes.

Financial Statement Disclosure

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Independent Auditors

Independent auditors are external auditors who examine the financial records and practices of a corporation to ensure accuracy and compliance with generally accepted accounting principles.