Glorious Gloria, a Florist, Had the Following Transactions in August

question 126

Multiple Choice

Glorious Gloria, a florist, had the following transactions in August: Earned $2,000 as revenues on account; collected $4,000 from a customer for goods sold last month; incurred $600 of repair expense and paid cash; paid $200 to a supplier that it owed from the previous month. What is the net income in August?

• A)$500
• B)$5,700
• C)$2,700
• D)$1,400

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, reflecting the time value of money.

Investment Tax Credit

A tax credit offered to entities to encourage investment in certain assets, offering a reduction in tax liability.

Total Assets Ratio

A financial metric comparing the total assets of a company to another financial measure, used to evaluate the company's financial health.

Tax Deductions

Expenses that can be deducted from adjusted gross income to reduce the amount of taxable income.