Bill Operates a Proprietorship Using the Cash Method of Accounting

question 65

Multiple Choice

Bill operates a proprietorship using the cash method of accounting, and this year he received the following:$240 in cash from a customer for services rendered this yeara promise from a customer to pay $172 for services rendered this yeartickets to a football game worth $180 as payment for services performed last yeara check for $198 for services rendered this year that Bill forgot to cash How much income should Bill realize on Schedule C?

• A)$240
• B)$412
• C)$420
• D)$438
• E)$618

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Definitions:

Traceable Fixed Expense

Fixed costs that can be directly linked to a specific business segment and would disappear if the segment was discontinued.

Price Reduction

The act of lowering the selling price of goods or services, often to stimulate demand, clear out inventory, or respond to market competition.

Target Costing

A pricing method that involves determining the desired cost for a product to ensure profitability at its anticipated selling price.

Desired Return

The profit or return that an investor or company aims to achieve on an investment or project.