Sales Revenues of a Utility for a Certain Fiscal Period

question 1

Multiple Choice

Sales revenues of a utility for a certain fiscal period

• A) Are equivalent to total debits to Customer Accounts Receivable for that period.
• B) Include receivables billed during a fiscal period,plus receivables billed early in the next year if meters were read before year-end.
• C) Should be reported on the cash basis for the sake of conservatism.
• D) Include billed receivables and an accrual for unbilled receivables as of the balance sheet date.

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Definitions:

Adjusting

The act of making entries to update the financial statements to more accurately reflect revenues and expenses for a specific reporting period.

Operating Activities

The day-to-day activities of producing and selling goods and/or services, which are reflected in the cash flow statement.

Indirect Method

A way of calculating cash flows in the cash flow statement, where net income is adjusted for changes in non-cash items and working capital.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.