On January 1, 2012, Mayson Corporation signed a contract to perform $25,000 worth of services for the Phillips Company over the next three years. Which of the following indicates the effects of this event on the income statement and statement of cash flows of Mayson Corporation?
A)Option A
B)Option B
C)Option C
D)Option D

Question

On January 1, 2012, Mayson Corporation signed a contract to perform $25,000 worth of services for the Phillips Company over the next three years. Which of the following indicates the effects of this event on the income statement and statement of cash flows of Mayson Corporation? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Simply signing a contract affects neither the income statement nor the statement of cash flows. It is not recorded in Mayson's financial statements.

On January 1, 2012, Mayson Corporation Signed a Contract to Perform