Given the Data Below for a Firm in Its First

question 28

Multiple Choice

Given the data below for a firm in its first year of operation determine net income under the accrual basis of accounting. $\begin{array} { l r } \text { Cash received from customers } & \$ 45,000 \\\text { Accounts receivable } & 12,000 \\\text { Cash paid for expenses } & 26,000 \\\text { Accounts payable (related to expenses) } & 3,000 \\\text { Prepaid rent for next period } & 7,000\end{array}$

• A)$19000
• B)$28000
• C)$21000
• D)$12000

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Definitions:

Empirical Investigation

A research method involving the collection of data through observation and experimentation to gain knowledge or test hypotheses.

Particular Activity

A specific action or endeavor undertaken by individuals or groups.

State of Mind

A person’s emotional and psychological condition at a particular time.

Supererogatory Actions

Actions that go beyond what is morally required or expected, typically considered voluntary and commendable but not obligatory.