Question

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

a. Cost of land purchased with cash for future use.
b. Rent expense incurred and paid for in the current reporting period.
c. Utilities expense incurred in the current period that won't be paid until the following period.
d. Revenue for services provided to customers who promise to pay in the next period.

Answer 1

The cost of land purchased with cash for future use would not be reported on the income statement.

Step-by-step explanation:

The correct option that would not be reported on the income statement is a. Cost of land purchased with cash for future use.

The income statement includes revenues and expenses that occurred during the reporting period. Option a, the cost of land purchased with cash for future use, is not an expense incurred during the reporting period and therefore would not be reported on the income statement. Instead, the cost of land would be classified as an asset on the balance sheet.