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

question 34

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) $21,000.
• B) $13,000.
• C) $25,000.
• D) $17,000.
• E) None of the above.

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Definitions:

Cholesterol

A waxy, fat-like substance found in all cells of the body, which is essential for the formation of cell membranes, certain hormones, and vitamin D, yet high levels can lead to health problems.

Poverty

The state of being extremely poor, leading to a lack of access to basic needs such as food, shelter, and clean water.

Mosquitoes

Flying insects known for their ability to feed on blood, acting as vectors for transmitting various diseases such as malaria and the Zika virus.

Malaria

A life-threatening disease caused by parasites that are transmitted to humans through the bites of infected mosquitoes, prevalent in tropical and subtropical regions.