Springer Corporation had the following transactions in August: Earned $2,000 of revenues on account; collected $4,000 from a customer for services provided last month; incurred $600 of repair expense and paid cash; paid $200 for rent that it owed from the previous month.
What is the net income in August?
A) $600
B) $4,000
C) $5,400
D) $1,400

Question

Quizplus · Accepted Answer

Net Income = Revenues - Expenses
Revenues = $2,000
Expenses = $600 (repair expense) + $200 (rent expense) = $800
Net Income = $2,000 - $800 = $1,200
Therefore, the net income for August is $1,200. The closest option is D) $1,400, but this is not the correct answer.

Springer Corporation Had the Following Transactions in August: Earned $2,000