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False. While revenue represents the total income generated from sales, it does not directly equate to cash flow. Factors such as credit sales, delayed payments, and operational expenses can lead to situations where revenue increases but cash flow remains tight or even negative. Thus, a business can report high revenue while struggling with liquidity.
What else can I help you with?
Is revenue a cash or debit?
Revenue is always credit as all revenue accounts has credit balance as normal balance and cash received or accounts receivable is debit against it.
The revenue recognition concept states that revenue should be recorded in the same period as the cash is received?
False Because it determines when revenue is credited to a revenue account. Cash method means the transaction is reported when cash is received, but the revenue recognition concept means a transaction is reported as a sale even if no money has been paid. Cash basis does not recognize payable or receivable accounts.
What effect does revenue in the income statement have on balance sheet assets?
When you report revenue, you will either increase cash or accounts receivable on the balance sheet depending on whether the cash was collected when earned.
Does collection on account receivable increase both cash and accounts recievable?
NO
What should be debited if sale made for cash?
When a sale is made for cash, the Cash account should be debited to reflect the increase in cash received. Simultaneously, the Sales Revenue account should be credited to recognize the income generated from the sale. This entry ensures that both the cash inflow and revenue are accurately recorded in the accounting records.
True or false revenue and cash will always be the same amount?
TURE
Is revenue a cash or debit?
Revenue is always credit as all revenue accounts has credit balance as normal balance and cash received or accounts receivable is debit against it.
The revenue recognition concept states that revenue should be recorded in the same period as the cash is received?
False Because it determines when revenue is credited to a revenue account. Cash method means the transaction is reported when cash is received, but the revenue recognition concept means a transaction is reported as a sale even if no money has been paid. Cash basis does not recognize payable or receivable accounts.
The accrual basis of accounting requires revenue be recorded when cash is received from customers?
False. Under the accrual basis of accounting, revenue is recorded when earned, not necessarily when cash is received. Revenue is earned when a sale is made, whether the customer pays cash or makes the purchase on account.
If you received 600 from a client on account where would you post it?
It depends on whether the client owes you money and what basis of accounting you use. If the client owes you money and you use the accrual basis then it posts as an increase (debit) to Cash and a decrease (credit) to accounts receivable. If they are paying in advance for future work then it's an increase (debit) to cash and a increase (credit) to deferred revenue. If you are on cash basis then you increase cash and revenue.
What effect does revenue in the income statement have on balance sheet assets?
When you report revenue, you will either increase cash or accounts receivable on the balance sheet depending on whether the cash was collected when earned.
Does collection on account receivable increase both cash and accounts recievable?
NO
What should be debited if sale made for cash?
When a sale is made for cash, the Cash account should be debited to reflect the increase in cash received. Simultaneously, the Sales Revenue account should be credited to recognize the income generated from the sale. This entry ensures that both the cash inflow and revenue are accurately recorded in the accounting records.
Is revenue always recognized when cash is collected?
no. revenue could be accounted for in a prior period. For example: Debit Accts Rec. Credit Sales. then Debit Cash. Credit Accts Rec. later in the future.
Could Cash flows from assets will always be less than cash lows from financing due to dividends?
False
Is total sales and the total revenue same thing?
Not always. There are sources of revenue other than sales. For example, a company with considerable cash assets may have some revenue from interest.
Would service revenue appear on the balance sheet?
Service revenue will appear on the income statement as a revenue account. It will indirectly effect the balance sheet in that it will be accompanied by an increase in either cash, accounts receivable, unbilled revenue (assets) or a decrease in unearned revenue (liability).
