Is Accounts Receivable A Revenue On An Income Statement

Which of the following is an income statement account a accounts receivable b.

Is accounts receivable a revenue on an income statement. Money that customers owe a company flows through the statement of financial position also referred to as a balance sheet or report on financial condition. The account rent revenue is also known as rental income. This means that the accounts receivable balance tends to be larger than the amount of reported revenue in any reporting period especially if payment terms are for a longer period than the duration of the reporting period. Generally speaking net income is revenues minus expenses under the accrual basis of accounting revenues and accounts receivable are recorded when a company sells products or earns fees by providing services on credit.

Conversely the amount of revenue reported in the income statement is only for the current reporting period. Collecting accounts receivable that are in a company s accounting records will not affect the company s net income. Which of the following is an income statement account a accounts receivable b from cbpa 301009 at camarines norte state college. When a sale takes place a revenue account will increase.

Accounts receivable also known as customer receivables don t go on an income statement which is what finance people often call a statement of profit and loss or p l. Definition of rent revenue. Note that this accrual of revenue increases the earnings stated on the company s p l. The income statement accounts most commonly used are as follows.

On august 9 the company s bookkeeper will increase accounts receivable with a debit dr and accrue revenue with a credit cr with the following journal entry. Rent revenue is the title of an income statement account which under the accrual basis of accounting indicates the amount of rent that has been earned during the period of time indicated in the heading of the income statement. Dr accounts receivable 10 000 cr revenue 10 000.