During 2010, Yoder Enterprises generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $30,000, operating expenses of $12,000 and a loss on the sale of equipment of $2,000.

Yoder's income from operations is

$60,000.

$12,000.

$18,000.

$30,000

Question 2

Rusthe Company showed the following balances at the end of its first year:
Cash $7,000
Prepaid insurance 700
Accounts receivable 3,500
Accounts payable 2,800
Notes payable 4,200
Denton, Capital 1,400
Denton, Drawing 700
Revenues 21,000
Expenses 17,500

What did Rusthe Company show as total credits on its trial balance?

$30,800

$29,400

$30,100

$28,700

James Corporation purchased a one-year insurance policy in January 2010 for $48,000. The insurance policy is in effect from May 2010 through April 2011. If the company neglects to make the proper year-end adjustment for the expired insurance

Net income and assets will be overstated by $16,000.

Net income and assets will be understated by $16,000.

Net income and assets will be understated by $32,000.

Net income and assets will be overstated by $32,000
Stahl Consulting started the year with total assets of $20,000 and total liabilities of $5,000. During the year, the business recorded $16,000 in catering revenues and $8,000 in expenses. Stahl made an additional investment of $3,000 and withdrew cash of $5,000 during the year. The owner's equity at the end of the year was

$2,000.

$8,000.

$21,000.

$18,000
If a company determines cost of goods sold each time a sale occurs, it

uses a periodic inventory system.

uses a combination of the perpetual and periodic inventory systems.

uses a perpetual inventory system.

must have a computer accounting system