Net income is reported on the income statement at $40,000. Adjusting entries for accrued revenues of $5,000 and unearned revenue earned during the current period of $2,000 were accidentally omitted. The correct net income is:

Question

Quizplus · Accepted Answer

Accrued revenues increase net income, while unearned revenues earned during the current period decrease net income. Therefore, the correct net income is $40,000 + $5,000 - $2,000 = $47,000.

Net Income Is Reported on the Income Statement at $40,000