ABC Delivery Service Had the Following Transactions in June: Earned

question 160

Multiple Choice

ABC Delivery Service had the following transactions in June: Earned $4,000 cash for services rendered; collected $2,500 from a customer "on account;" paid out $200 cash for plumbing services; received $3,500 of supplies and promised to pay one month later; paid out $1,000 in cash drawings to the owner.
-How much was Net income in June?

• A) $5,300
• B) $2,800
• C) $6,300
• D) $3,800

---

Definitions:

Total Assets

The sum of all assets owned by a company, including current, fixed, and intangible assets, as reported on the balance sheet.

Capacity Utilization

The percentage of a firm or industry's total production capacity that is actually being used over a specific period.

Plug Variable

A variable that is used in financial modeling to make the balance sheet balance, often representing the financing needed or surplus cash.

External Financing

Funds that a business obtains from outside sources to finance its operations, growth, or projects, which can include loans, equity investments, and bonds.