Norris Company Experienced the Following Transactions During 2013, Its First

question 94

Multiple Choice

Norris Company experienced the following transactions during 2013, its first year in operation.
1) Issued $6,000 of common stock to stockholders.
2) Provided $2,300 of services on account.
3) Paid $1,600 cash for operating expenses.
4) Collected $1,900 of cash from accounts receivable.
5) Paid a $100 cash dividend to stockholders.
The amount of net income recognized on Norris Company's 2013 income statement is:

• A) $500.
• B) $400.
• C) $700.
• D) $600.

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Definitions:

Zero-Balance Account

A bank account that keeps a zero balance by instantly moving money from a primary account in the precise amount needed to settle any checks drawn on it.

Regional Offices

Physical locations established by companies in various regions or countries to handle local operations or provide support.

Lockboxes

A service offered by banks to companies for the collection of payment from customers, involving the use of special post office boxes.

Transactions Needs

The requirement for cash or liquid assets for the purpose of meeting immediate expenses or financial obligations.