Wong Ho Company Had the Following Transactions During 2013

question 124

Multiple Choice

Wong Ho Company had the following transactions during 2013:
-Sales of ¥11,000 on account
-Collected ¥4,000 for services to be performed in 2014
-Paid ¥1,250 cash in salaries
-Purchased airline tickets for ¥500 in December for a trip to take place in 2014
What is Wong Ho's 2013 net income using accrual accounting?

• A) ¥9,750.
• B) ¥13,750.
• C) ¥13,250.
• D) ¥9,250.

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Definitions:

Journal Entries

The method by which financial transactions are recorded in an accounting system, involving a debit to one or more accounts and a credit to one or more accounts.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control those policies; often evidenced by ownership of 20% to 50% of the voting shares of the investee.

Fair Value

The revenue generated from selling an asset or the charge for relocating a liability in a formal trade between market counterparts at the appraisal time.

Journal Entries

Records that note the details of financial transactions in accounting, following the double-entry bookkeeping method.