The following accounts and balances were drawn from the records of Hoover Company on December 31, 2013: $$\begin{array} { l r l r }
\text { Cash } & \$ 1,000 & \text { Accounts Receivable } & \$ 850 \
\text { Dividends } & 500 & \text { Common Stock } & 975 \
\text { Land } & 800 & \text { Revenue } & 800 \
\text { Accounts Payable } & 450 & \text { Expense } & 550
\end{array}$$ The amount of net income shown on the December 31, 2013 income statement would amount to:
A) $550.
B) $800.
C) $50.
D) $250.

Question

The following accounts and balances were drawn from the records of Hoover Company on December 31, 2013: $$\begin{array} { l r l r } 
\text { Cash } & \$ 1,000 & \text { Accounts Receivable } & \$ 850 \
\text { Dividends } & 500 & \text { Common Stock } & 975 \
\text { Land } & 800 & \text { Revenue } & 800 \
\text { Accounts Payable } & 450 & \text { Expense } & 550
\end{array}$$ The amount of net income shown on the December 31, 2013 income statement would amount to:
A) $550.
B) $800.
C) $50.
D) $250.

Quizplus · Accepted Answer

Net income is calculated as Revenue minus Expenses. Here, Revenue is $800 and Expenses are $550, so Net Income is $800 - $550 = $250.

The Following Accounts and Balances Were Drawn from the Records