Question

Consider the following account balances of Smiths Corp. at the end of the year:

Cash $12,000
Unearned Revenue $18,000
Interest Revenue $5,000
Supplies $3,500
Common Stock $25,000
Rent Expense $6,000
Accounts Receivable $11,700
Salaries Expense $7,500
1. How many of these accounts would be reported in the company’s income statement?

Answer 1

Interest revenue, rent expense and salaries expense

Step-by-step explanation:

In the income statement, the total revenues and the total expenses are recorded.

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

So, the categorization is shown below:

Interest revenue, rent expense and salaries expense