During January 2018,the first month of operations,a consulting firm had following transactions: 1.Issued common stock to owners in exchange for $20,000 cash.
2.Purchased $5,000 of equipment,paying $1,000 cash and signing a promissory note for $4,000.
3.Received $9,000 in cash for consulting services performed in January.
4.Purchased $1,500 of supplies on account;all of the supplies were used in January.
5.Provided consulting services on account in the amount of $16,000.
6.Paid $750 on account.
7.Paid $3,000 to employees for work performed during January.
8.Received a bill for utilities for January of $3,400;the bill remains unpaid.
What is the total expenses that will be reported on the income statement for the month ended January 31?
A)$3,750.
B)$7,900.
C)$8,150.
D)$4,500.

Question

Quizplus · Accepted Answer

Expenses are costs of operating the business,incurred to generate revenues in the period covered by the income statement.Expenses are reported when the company uses something.
Total expenses = Supplies Expense + Salaries and Wages Expense + Utilities Expense
= $1,500 + $3,000 + $3,400 = $7,900

During January 2018,the First Month of Operations,a Consulting Firm Had