Greg Company recognized revenue on account. Which of the following financial statements are affected by this accounting event?
A) Balance sheet
B) Income statement
C) Statement of cash flows
D) Income statement and the balance sheet

Question

Quizplus · Accepted Answer

Revenue recognition affects both the income statement, where it is recognized as revenue, and the balance sheet, where accounts receivable (resulting from the recognition of revenue on account) are recorded. The statement of cash flows is not affected by revenue recognition directly, but may be indirectly affected through changes in accounts receivable and cash collections from customers.

Greg Company Recognized Revenue on Account