Which of the following statements about the income statement is not correct?
A)Amounts received from customers for services performed in the current month would be revenues on the income statement.
B)Costs incurred in the current month but not paid as of the end of the month would be expenses on the income statement for the current month.
C)Amounts received from customers in payment of their accounts arising from service in the prior month would be revenues in the income statement for the current month.
D)Amounts received from customer as deposits for services to be rendered next month will not be recorded as revenues on the income statement for the current month.

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue is recorded when the performance obligation is satisfied and the expense recognition principle says expenses are reported in the same period as the revenues they helped to generate.Amounts received from customers in payment of their accounts arising from service in the prior month would be revenues in the income statement for the prior month when the services were performed,rather than in the current month,when payment was received.

Which of the Following Statements About the Income Statement Is