Assume That Discontinuing Product J Would Result in a $30,000

question 6

Multiple Choice

Assume that discontinuing Product J would result in a $30,000 increase in the contribution margin of other product lines.If Bingham chooses to discontinue Product J,then the change in net income next year due to this action will be a:

• A) $145,000 decrease.
• B) $5,000 increase.
• C) $120,000 increase.
• D) $145,000 increase.

---

Definitions:

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate revenue and expenses to the correct periods.

Cash

Money in the form of coins or banknotes, especially that issued by a government.

Adjusting Entries

Journal records created during the final part of an accounting period for the purpose of attributing revenues and expenses to the timeframe in which they actually took place.

Correct Balances

Accurate financial figures in accounting records that match the real-world values of assets, liabilities, and equity.