The Net Income of Thomas Company Was $73,000 for This

question 62

Multiple Choice

The net income of Thomas Company was $73,000 for this year.The beginning balance of Thomas,Capital was $32,000 and the ending balance was $71,000.There were no new capital contributions during the year.What was the amount of withdrawals during the year?

• A) $71,000
• B) $34,000
• C) $144,000
• D) $32,000

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Definitions:

Income Tax Withholding

The process where employers deduct tax from employees' wages and directly pay it to the government.

Exemption

In taxation, an exemption is a monetary exclusion that can be applied to reduce taxable income, often granted by the government to reduce the tax burden for certain groups, circumstances, or types of income.

Qualifying Relative

A dependent for whom the taxpayer provides financial support and who meets certain IRS criteria for tax benefits.

Dependent Taxpayer Test

Criteria used to determine if a taxpayer can be claimed as a dependent on someone else's tax return, affecting exemptions and credits.