Which of the following transactions results in an increase in revenues?
A)Receipt of accounts receivable.
B)Purchase of inventory.
C)Receipt of principal from a bank loan.
D)Delivery of a service in exchange for future payment.

Question

Quizplus · Accepted Answer

Delivery of a service in exchange for future payment results in an increase in revenues as it represents revenue earned but not yet received. The other options do not result in an increase in revenues: receipt of accounts receivable represents cash already received for past sales; purchase of inventory is an expense; and receipt of principal from a bank loan is a financing activity, not a revenue-generating activity.

Which of the Following Transactions Results in an Increase in Revenues