Question

Sales Revenue and Service Revenue are two income statement accounts that relate to Accounts Receivable. Name two other accounts related to Accounts Receivable and Notes Receivable that would be reported on the income statement and indicate whether each would appear before, or after, Income from Operations.

Answer 1

Answer:

Trades receivable and bad debt; go after income from operations

Explanation:

The other two types of Accounts receivable are trades receivable and bad debt. Trades receivable increase the company's transactions, when for instance customer buys a product and has short-term loan this in noted in current trades account. Bad debt relates to a claim to the debtor that will be received some time in the future. It can also relate to a debt which can't be collected and is therefore written off and becomes tax deduction from the revenue. They both appear after income from operations as they reduce, because they relate to the revenues that will be charged in later period and not the current one.