Rushmore Company provided services for $45,000 cash during the 2016 accounting period.Rushmore incurred $36,000 expenses on account during 2016,and by the end of the year,$9,000 of that amount had been paid with cash.Assuming that these are the only accounting events that affected Rushmore during 2016,
A)The amount of net loss shown on the income statement is $9,000.
B)The amount of net income shown on the income statement is $27,000.
C)The amount of net income shown on the income statement is $9,000.
D)The amount of net cash flow from operating activities shown on the statement of cash flows is $18,000.

Question

Quizplus · Accepted Answer

Net income is calculated as total revenues minus total expenses. Rushmore's revenue is $45,000, and the total expenses are $36,000, resulting in a net income of $9,000.

Rushmore Company Provided Services for $45,000 Cash During the 2016