During the month of March 2017, Weimar World, a tax-preparation service, had the following transactions.
$\bullet$Billed $496,000 in revenues on credit
$\bullet$Received $164,000 from customers' accounts receivable
$\bullet$Incurred expenses of $194,000 but only paid $87,700 cash for these expenses
$\bullet$Prepaid $32,220 for computer services to be used next month
What was the company's accrual basis net income for the month?
A) $ 302,000
B) $ 264,080
C) $ 41,860
D) $408,300
E) None of the above

Question

Quizplus · Accepted Answer

Accrual basis net income is calculated as revenues earned minus expenses incurred. Revenues billed were $496,000, and expenses incurred were $194,000. Therefore, the net income is $496,000 - $194,000 = $302,000.

During the Month of March 2017, Weimar World, a Tax-Preparation ∙\bullet∙

During the Month of March 2017, Weimar World, a Tax-Preparation $\bullet$