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The net income is $600 using accrual accounting and $300 using the cash method.
What is the net income?
Net income is total revenue less total expenses. It is a measure of the profit that is earned by a business.
Net income = revenue - expenses
Accrual accounting is an accounting method in which an expense or income is recorded at the time when the transaction occurs
Net income using the accrual accounting = $1400 - $800 = $600
In the cash accounting method an expense or income is recorded when payment is made
Net income using the cash accounting method = $1000 - $700 = $300
Here is the complete question:
During May, Many Happy Returns, Inc. earned $1,400, of which $1,000 was collected, and had expenses of $800, of which $700 was paid.
Its not income equals
$300 using accrual accounting versus $600 using cash basis.
$700 using accrual accounting versus $200 using cash basis.
$600 using accrual accounting versus $300 using cash basis.
$200 using accrual accounting versus $700 using cash basis.
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