As of December 31, Year 1, Mason Company had $500 cash. During Year 2, Mason earned $1,200 of cash revenue and paid $800 of cash expenses. What is the amount of cash that would be reported on the balance sheet at the end of Year 2?

Question

Quizplus · Accepted Answer

The cash at the end of Year 2 is calculated by taking the cash at the end of Year 1 ($500), adding the cash revenue earned in Year 2 ($1,200), and subtracting the cash expenses paid in Year 2 ($800). This results in $500 + $1,200 - $800 = $900.

As of December 31, Year 1, Mason Company Had $500