Use the following appropriate amounts to calculate net income: Revenues,$12,000; Liabilities,$5,000; Expenses,$4,000; Assets,$19,000; Dividends,$4,000.

Question

Quizplus · Accepted Answer

Net Income can be calculated by subtracting Expenses and Dividends from Revenues. 
Net Income = Revenues - Expenses - Dividends 
= $12,000 - $4,000 - $4,000 
= $4,000 
However, this question asks for Net Income after considering Liabilities and Assets as well. 
Net Income = Assets - Liabilities 
= $19,000 - $5,000 
= $14,000 
Therefore, the correct answer is B) $8,000.

Use the Following Appropriate Amounts to Calculate Net Income: Revenues,$12,000;