Smith Technical Services Is Working on a Six-Month Job for a Client,starting

question 27

Multiple Choice

Smith Technical Services is working on a six-month job for a client,starting on 1 February.They will collect $20,000 from their customer when the job is finished.On 1 March,their Accounts receivable account had a debit balance of $4000.At the end of March,after monthly adjusting entries have been made,what will be the balance in Accounts receivable?

• A)Debit balance of $3333
• B)Debit balance of $7333
• C)Credit balance of $16,667
• D)Debit balance of $20,000

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Definitions:

Tax Rate

The tax rate is the percentage at which an individual or corporation is taxed.

EBIT

Stands for Earnings Before Interest and Taxes, a financial indicator that calculates a firm's profit excluding interest and income tax expenses.

Cost of Capital

A company's expense of funding its operations either through debt, equity, or a combination, representing the return rate investors expect.

Tax Rate

The level at which a person or business's income is subjected to taxation.