Which of the Following Would Not Be Reported on the Income

question 60

Multiple Choice

Which of the following would not be reported on the income statement?

• A) Utilities expense in the amount of a bill received for utilities used during the current period but unpaid as of the end of the period.
• B) Rent expense in the amount of rent paid during the period for use of a storage facility in the current period.
• C) Revenue in the amount of services provided to customers who promise to pay in the next period.
• D) Cost of land purchased with cash for future use.

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Definitions:

Depreciation

A method of allocating the cost of a physical or tangible asset over its expected usable life to account for decreases in value over time.

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Asset Cost

The total amount incurred to acquire an asset, including purchase price and all expenditures necessary to bring the asset to its intended use.