Please show work!!! pt During the year, X Company sold merchandise on account to
ID: 2392968 • Letter: P
Question
Please show work!!!
pt During the year, X Company sold merchandise on account to customers for $403,000 The company collected $394,000 n cash from customers during the year. Which of these amounts appears on the Income Statement and which appears on the Statement of Cash Flows? OWs 0.AO $9,000 appears on both statements BO $403,000 appears on both statements CO $9,000 appears on the Income Statement and $394,000 appears on the Statement of Cash Flows DO $394,000 appears on the Income Statement and $403,000 appears on the Statement of Cash Flows EO $403,000 appears on the Income Statement and $394,000 appears on the Statement of Cash Flows O $394,000 appears on both statementsExplanation / Answer
Answer:-
E) $403000 in income statement and $394000 in statement of cash flows
In Income Statement, as per accural concept entire revenues earned (whether collected or not) should be recorded. So, $394000 plus $9000 (to be collected) both to be shown in Income Statement.
In Statement of Cash Flows, only the amount collected should be recorded. So, only $394000 is shown.