Which of the following accounts are included in the revenue process on the income statement?
A)Accounts receivable
B)Increases to the cash account
C)Bad debt expense
D)Sales returns and allowances
E)Allowance for doubtful accounts
F)both A and B
G)both C and D
H)both A and E

Question

Quizplus · Accepted Answer

The revenue process on the income statement includes all aspects of recording and recognizing revenue, as well as adjustments related to sales. Bad debt expense (C) and sales returns and allowances (D) are directly related to the revenue process as they adjust the gross revenue to reflect the net revenue accurately. Bad debt expense accounts for the estimated uncollectible amounts from customers, and sales returns and allowances account for the reduction in revenue due to returned or discounted sales.

Which of the Following Accounts Are Included in the Revenue