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<p><strong> A.$12,000</strong><strong> B.$8000</strong><strong>C.$14,000</strong><strong>D.$10,000</strong></p> <p><strong>E. Non of these.</strong></p>
Ans. (C) 14,000
Net profit
Add: Increase in interest received in advance
= Cash from operation
I agree with Lesley.
Option E
Ans: (D)10,000
option C is the correct
C
The Answer is A.12000 according to profit/loss/income statement accounting and Balance sheet/financial position............. Interest received in advance is prepayment which is considered as a liability until when the time related to such transaction and obligation are due and performed henceforth the profit for year of13000, add the1000 interest advance earning0n the beginning of year since it must have materialized and subtract the2000 advance interest earned at the end of the year and consider it as a liability in the books of account until it related time in future.
For Cash from operation, All the received interest advance will be debited with that is the2000 at the end of2011 and subtract the1000 already consider as income due to it maturity. then the Answer will be C.14000 according to cash flow statement accounting.
C) $14,000
The answer is A
0
net profit + net increase in Advance interest
0+()=0
