After All of the Account Balances Have Been Extended to the Income

question 66

Multiple Choice

After all of the account balances have been extended to the Income Statement columns of the work sheet, the totals of the debit and credit columns are $77,500 and $83,900, respectively. What is the amount of the net income or net loss for the period?

• A) $6,400 net income
• B) $6,400 net loss
• C) $83,900 net income
• D) $77,500 net loss

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt with its operating income.

Efficiency

The ability to accomplish a job with a minimum expenditure of time and resources.

Revenue Generated

Income received from business activities like sales, services, and other operations.

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term liquidity.