Using the accrual basis of accounting, what would be the net income for a company in May if it billed out $12,000?

In accrual accounting, net income is determined by recognizing revenue when it is earned, regardless of when the cash is received. In this scenario, the company billed out $12,000 in May, indicating that it provided services or delivered goods worth this amount during the month. Therefore, under the accrual basis, the revenue recognized for the month is $12,000.

However, to accurately calculate the net income, one must also consider the associated expenses incurred during that same period. If the expenses total to $6,000, the net income would be calculated by subtracting those expenses from the recognized revenue:

Net Income = Revenue - Expenses

Net Income = $12,000 - $6,000

Net Income = $6,000

Thus, the correct net income for May would be $6,000, since this reflects the revenue earned minus the expenses incurred in generating that revenue, consistent with the principles of accrual accounting.