ANSWER PLATFORM
Home
LOGOUT
REPORTED!
Question:
content loaded
Is service revenue on the right or left side of the balance sheet?
2) Left side( give answer in 300-350 words)
Edit your answer
Final answer:
Service revenue is part of the income statement, not the balance sheet. The balance sheet lists assets on the left side and liabilities and equity on the right. Service revenue would show up as part of the income statement, demonstrating a company's financial performance over a particular period through revenues and expenses.
Step-by-step explanation:
Service revenue would not be found on either the right or left side of the balance sheet because it is not a balance sheet item. Service revenue is recorded on the income statement of a business, which reflects a company's performance over a period of time. The balance sheet, on the other hand, presents the company's financial position at a specific point in time and consists of assets, liabilities, and shareholders' equity. Assets are typically on the left side and show what the company owns or is owed, while liabilities and equity on the right side represent the sources of the company's assets, including what it owes to creditors and what is owned by the shareholders.
Referring to the self-check question's scenario, where a firm had sales revenue of $1 million and expenses totaling $950,000 ($600,000 for labor, $150,000 for capital, and $200,000 for materials), the firm's accounting profit would be the difference between the sales revenue and the expenses. Therefore, the firm's accounting profit is $50,000 ($1,000,000 - $950,000).
In the context of saving and investment identity, the government's supply of savings being on the left side relates to the broader economic equation of Y = C + I + G + (X-M), where Y is national income, C is consumption, I is investment, G is government spending, and (X-M) represents net exports. If the government is experiencing a budget surplus, it effectively adds to the national savings since G would be less than the total taxes received (T), hence (T - G) is positive and on the left side, which indicates an input to the overall savings in the economy.
PREVIOUS STEP
POST ANSWER
Footer