The Income Statement for the Month of June, 2022 of Snap

question 148

Multiple Choice

The income statement for the month of June, 2022 of Snap Shot, Inc. contains the following information: $\begin{array}{lr}\text { Revenues }&&\$7,300\\\text { Expenses: }\\\text { Salaries and Wages Expense } & \$ 3,000 \\\text { Rent Expense } & 1,300 \\\text { Advertising Expense } & 700 \\\text { Supplies Expense } & 200 \\\text { Insurance Expense } & 100 \\\text { Total expenses }&&5,300\\\text { Net income (loss) }&&\$2,000\end{array}$ The entry to close the expense accounts includes a

• A) debit to Income Summary for $2,000.
• B) credit to Rent Expense for $1,300.
• C) credit to Income Summary for $5,300.
• D) debit to Salaries and Wages Expense for $3,000.

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Definitions:

Marginal Product

The rise in production resulting from one more unit of input.

Price of Labor

The compensation workers receive for their contribution to the production process, often synonymous with wage rate.

Economic Profits

The margin by which a firm's total sales exceed its complete set of expenses, both overt and covert.