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

question 378

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 cash basis of accounting is:

• A)$17,000.
• B)$21,000.
• C)$13,000.
• D)$25,000.
• E)None of the answer choices is correct.

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Definitions:

Buying and Selling

The basic components of commerce, where goods or services are purchased by buyers from sellers in exchange for money.

Consumers

Individuals or groups who are the final users of products and services produced within an economic system.

Web Portal

An Internet site whose purpose is to be a major starting point for users when they connect to the web.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of raw material from the supplier to the final delivery to the end customer.