During 20B, New Company earned service revenues amounting to $200,000, of which $120,000 were collected in cash; the balance will be collected in January 20C. The 20B statement of earnings of the company should report which of the following amounts for service revenues?
A) $120,000.
B) $200,000.
C) $320,000.
D) $80,000.

Question

Quizplus · Accepted Answer

The statement of earnings should report the total amount of service revenues earned during the period, regardless of whether they have been collected in cash or not. Therefore, the amount of service revenues should be $200,000.

During 20B, New Company Earned Service Revenues Amounting to $200,000