If a Company Incorrectly Records Cash Received for Services to Be

question 61

Multiple Choice

If a company incorrectly records cash received for services to be provided in the future with a debit to Cash and credit to Sales Revenue,how will this error affect net income for the current period?

• A)Net income will be too high.
• B)Net income will be too low.
• C)Net income will not be affected by this error.
• D)Net income will be too high in the following period.

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Definitions:

Massage Therapy

A healthcare practice where manipulation, rubbing, and kneading of the body's muscles and soft tissues are used to promote health and wellbeing.

Unpaid Massage Therapy Sessions

Refers to instances where massage therapy services have been provided but payment has not been received.

Preserve Relationship

Efforts or actions taken to maintain and protect the quality of a relationship, often in a personal, business, or legal context.

Sexual Misconduct

Behavior of a sexual nature that is not appropriate or legal, typically in a workplace or institutional setting.