In its first year of operations,Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received from customers) ; Incurred expenses of $35,000 ($31,000 cash paid toward them) ; Prepaid $8,000 cash for costs that will not be expensed until next year.Net income under the cash basis of accounting is:

A) $17,000.
B) $21,000.
C) $13,000.
D) $25,000.
E) None of the answer choices is correct.

In the context of organizational structures, identify a difference between a functional structure and a network structure.

A) Division of labor in a functional structure is based on outputs, whereas division of labor in a network structure is based on inputs.
B) Coordination is hierarchical in a functional structure, whereas coordination in a network structure is in the form of cross-functional teams.
C) A functional structure organizes units based on the products manufactured, whereas a network structure organizes units based on the activities that each unit performs.
D) The importance of informal structure is modest in a functional structure, whereas the importance of informal structure is low in a network structure.