In Its First Year of Operations, Grace Company Reports the Following

question 78

Multiple Choice

In its first year of operations, Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received from customers) ; Incurred expenses of $35,000 ($31,000 cash paid toward them) ; Prepaid $8,000 cash for costs that will not be expensed until next year. Net income under the accrual basis of accounting is:

• A)$13,000.
• B)$21,000.
• C)$25,000.
• D)$17,000.
• E)None of these options are correct

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Definitions:

Reporter

A journalist who investigates, collects, and presents information as news.

Inaccuracy

The quality of being incorrect or not precise, often leading to errors in understanding or representation.

Newsworthy

Information or events considered significant or interesting enough to be reported in the news media.

Homicides

The act of killing another human being, either lawfully or unlawfully.