Bob Jones Is a Sole Proprietor Who Began His Business

question 125

Multiple Choice

Bob Jones is a sole proprietor who began his business in 2016 with $20,000 cash. During the year 2016, he earned revenues of $180,000, incurred expenses of $75,000, and withdrew $120,000. Which of the following is true for the sole proprietorship?

• A)The net income is $120,000.
• B)The drawing account will be closed with a credit of $100,000.
• C)The owner's equity at the end of 2016 is $125,000.
• D)The capital account balance at the end of year 2016 is $5,000.

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Definitions:

Performance Evaluation

A method or process used to assess an employee's job performance and productivity in relation to established criteria and objectives.

Actual Sales

Actual sales refer to the real revenue generated from goods or services sold by a business within a specific period, as opposed to projected or estimated sales.

Results Method

A performance evaluation approach focusing on the outcomes or outputs of an employee’s work rather than the process.

Forced-Distribution System

A performance management system where employees are ranked in comparison with each other and placed into predetermined performance categories.