Rushmore Company provided services for $45,000 cash during Year 1.Rushmore incurred $36,000 of operating expenses on account during Year 1,and by the end of the year,$9,000 of that amount had been paid with cash.If these are the only accounting events that affected Rushmore during Year 1,which of the following statements is true?

Question

Quizplus · Accepted Answer

Net income = Revenue of $45,000 - Operating expenses of $36,000 = $9,000
Net cash flow from operating activities = Cash collections of $45,000 - Cash payments for operating expenses of $9,000 = $36,000

Rushmore Company Provided Services for $45,000 Cash During Year 1