Which of the following statements about the income statement is not correct?
A) Amounts received from customers for services performed in the current month would be revenues on the income statement.
B) Costs incurred in the current month but not paid as of the end of the month would be expenses on the income statement for the current month.
C) Amounts received from customers in payment of their accounts arising from service in the prior period would be revenues in the income statement for the current period.
D) Amounts received from customer as deposits for services to be rendered next month will not be recorded as revenues on the income statement for the current month.

Question

Quizplus · Accepted Answer

Amounts received from customers in payment of their accounts arising from service in the prior period would be revenues on the income statement for the prior period, not the current period. The income statement reflects revenues and expenses for a specific period of time, typically a month or a year. It does not consider amounts received or paid outside of that time period. Therefore, revenues from prior periods would be included in the income statement for the period in which they were earned, not the period in which they were received.

Which of the Following Statements About the Income Statement Is