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

question 111

Multiple Choice

After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns show debits of $36,678 and the credits of $41,101. This indicates that

• A) neither net income or loss can be calculated because it is found on the income statement
• B) the company has a net loss of $4,423 for the period
• C) the company has a net income of $4,423 for the period
• D) The amounts are out of balance and need to be corrected

---

Definitions:

Ordinary Income

Income earned from standard operations, including wages, salaries, tips, and interest, subject to regular taxation rates.

S Corporations

A type of corporation that meets specific Internal Revenue Code requirements, allowing it to pass income directly to shareholders and avoid double taxation.

Royalties

Payments made to the owner of certain types of intellectual property, rights, or assets for the use of said property by others.

Trademarks

A legal designation of exclusive use of a brand or product name, protecting it from use by others.