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?


A) Net income will be too low.

B) Net income will be correct.

C) Net income will be too high.

D) Not possible to determine.


Answer: C


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Accounting

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