Consider the following transactions: I. Owners invested $8,000 cash to begin the business
II. Provided services for cash, $6,000
III. Provided services on account, $4,000
IV. Paid cash for expenses, $7,500
How much net income did the business have?

Question

Quizplus · Accepted Answer

Net income is calculated as total revenues minus total expenses. The revenues from services provided are $6,000 (cash) + $4,000 (on account) = $10,000. The expenses paid in cash are $7,500. Therefore, net income is $10,000 - $7,500 = $2,500.

Consider the Following Transactions: I