Question

If a company collected $1,000 from its customers in advance and then fulfilled $800 of its obligation and incurred expenses of $700 of which it paid $300, using accrual basis accounting, it would report net income equal to ____.

Answer 1

Using accrual basis accounting, it would report net income equal to $100

Using this formula

Net income=Revenue-Expenses incurred

Where:

Revenue=$800

Expenses incurred=$700

Let plug in the formula

Net income=$800-$700

Net income=$100

Inconclusion Using accrual basis accounting, it would report net income equal to $100

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