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

question 12

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 accrual basis of accounting is:

• A) $13,000.
• B) $21,000.
• C) $25,000.
• D) $17,000.
• E) None of these options are correct

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Definitions:

Engage for Good

An organization or initiative focused on facilitating partnerships between businesses and non-profit organizations to promote social causes and engagement.

Insufficient Funding

A situation where the financial resources available are not adequate to support the intended projects or operations.

Nonprofits

are organizations dedicated to furthering a particular social cause or advocating for a shared point of interest, without the aim of generating profits for owners or shareholders.

Donor Relationships

The strategic management of interactions and communication with individuals or entities that financially support an organization, to encourage ongoing and increased support.