Question

After all of the account balances have been extended to the Income statement columns of the worksheet, the totals of the debit and credit columns are $20,303 and $27,586, respectively. What is the amount of the net income or net loss for the period? a. $7, 283 net income b. $20, 303 net income c. $7, 283 net loss d. $27, 586 net loss

Answer 1

Answer:

a. $7, 283 net income

Explanation:

The debits in an income statement represents the expenses while the credit entries represent the income. As such, given;

Total debits = $20,303

Total credits = $27,586

Net income/(loss) = $27,586 - $20,303

                             = $7,283

Since the total credit (income) is more than the total debit, the net of the two balances result in a net income.

The answer is a. $7, 283 net income.