The Following Is Jim Walker's Income for 1995 and 2007

question 115

Multiple Choice

The following is Jim Walker's income for 1995 and 2007. What was Jim's real income for 2007?

• A) $37,000
• B) $67,000
• C) $34,387
• D) $38,908

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Definitions:

Contingent Liability

Contingent liability is a potential financial obligation that may arise in the future, dependent on the outcome of a specific event.

Financial Statements

Structured reports that convey the financial activities and condition of a business or individual, including balance sheets, income statements, and statements of cash flows.

Warranty Liability

An obligation companies assume when they provide a promise to repair, replace, or refund products that fail to perform as expected.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate period.