Use This Information from the Income Statement Columns of the Work

question 17

Multiple Choice

Use this information from the Income Statement columns of the work sheet of Corner Laundry Service to answer the following question.
$\begin{array} { | l | r | r | } \hline & { \text { Income Statement } } \\\hline & \text { Debit } & \text { Credit } \\\hline \text { Laundry Revenue } & & 2,500 \\\hline \text { Wages Expense } & 750 & \\\hline \text { Rent Expense } & 500 & \\\hline \text { Supplies Expense } & 300 & \\\hline \text { Insurance Expense } & 200 & \\\hline \text { Income Taxes Expense } & 50 & \\\hline & 1,800 & 2,500 \\\text { Net Income } & 700 & \\\hline & 2,500 & 2,500 \\\hline\end{array}$
The entry to close the Laundry Revenue account includes a

• A)\(\begin{array} { c c c }
• \text { Laundry Revenue } & 2,500 \\
• \text { Income Summary } & & 2,500
• \end{array}\)
• B)Income Summary \(\quad 2,500\)
• Laundry Revenue\(\quad\)\(\quad\)2,500
• C)Retained Earnings\(\quad\)\(\quad\)2,500
• Income Summary\(\quad\)\(\quad\)2,500
• D)Retained Earnings\(\quad\)\(\quad\)2,500
• Laundry Revenue\(\quad\)\(\quad\)2,500

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Definitions:

Project's Liquidity

The ease with which a project's assets can be converted into cash without significant loss of value.

Discount Rate

The discount rate employed to ascertain the present worth of forthcoming cash flows in an analysis of discounted cash flow.

NPV

Net Present Value; the calculation of the present value of cash inflows minus the present value of cash outflows over a period.

Cash Flows

The movement of money into and out of a business, representing its operating, investing, and financing activities.