Question

In the absence of an investment income receivable and a long-term investment account, we can conclude that the amount of investment revenue reported on the income statement _________ received during the current year?

1) is equal to the amount of investment revenue earned
2) is greater than the amount of investment revenue earned
3) is less than the amount of investment revenue earned
4) cannot be determined without additional information

Answer 1

The amount of investment revenue reported on the income statement is equal to the amount of investment revenue earned during the current year when there is an absence of an investment income receivable and a long-term investment account.

Step-by-step explanation:

The amount of investment revenue reported on the income statement is equal to the amount of investment revenue earned during the current year when there is an absence of an investment income receivable and a long-term investment account. This means that the revenue earned from investments is recognized and reported as revenue in the income statement in the same period it is earned.