If a company records cash received for services to be provided in the future with a debit to Cash and a credit to Service Revenue, how will this error affect net income for the current period?

 If a company records cash received for services to be provided in the future with a debit to Cash and a credit to Service Revenue, how will this error affect net income for the current period?

Multiple Choice

Net income will be too high.



Net income will be correct.


Not possible to determine.


Net income will be too low.

Answer

 Net income will be too high.

 

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