The net profit reported on the profit and loss statement is $50 000.However,adjusting entries have not been made at the end of the period for an electricity expense of $500 and accrued salaries of $1300.Net profit should be:

Question

Quizplus · Accepted Answer

The adjusting entries have not been made for the electricity expense and accrued salaries, which means that these expenses have not been recorded in the books yet. These adjustments will decrease the net profit. Therefore, we need to subtract the electricity expenses and the accrued salaries from the reported net profit to arrive at the correct net profit. 
$50,000 - $500 - $1300 = $48,200.  
Therefore, the correct answer is A) $48 200.

The Net Profit Reported on the Profit and Loss Statement