Please show work!!! pt During the year, X Company sold merchandise on account to

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 statements

Explanation / 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.

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