Question

Sunshine company had a credit balance of $4,000 in accounts payable at the beginning of the period, and a credit balance of $6,000 at the end of the period. based on this information, the adjustment to net income for the period will be reported as:

multiple choice question. A. decrease of $2,000 which will be subtracted from net income B. increase of $2,000 which will be added to net income C. increase of $2,000 which will be subtracted from net income D. daecrease of $2,000 which will be added to net income

Answer 1

The adjustment to net income for the period will be an B. increase of $2,000 which will be added to net income.

Step-by-step explanation:

In this case, the accounts payable balance increased from $4,000 at the beginning of the period to $6,000 at the end of the period. To calculate the adjustment to net income, we need to find the difference between the ending balance and the beginning balance.

The adjustment to net income for the period can be determined by comparing the accounts payable balance at the beginning and end of the period. Thus, the accounts payable balance increased from a credit balance of $4,000 to a credit balance of $6,000. Therefore, the adjustment to net income for the period will be reported as an increase of $2,000 which will be added to net income (option B).