Which of the following accounts appears in one of the income statement columns of the worksheet?

• A. Service Revenue
• B. Owner's Capital
• C. Prepaid Insurance
• D. Accounts Payable

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the purpose of the income statement. The income statement is used to report a company's revenues and expenses over a specific period, ultimately showing the net income or loss.
2. Step 2: Identify the types of accounts that appear on the income statement. These include revenue accounts (e.g., Service Revenue) and expense accounts (e.g., Rent Expense, Salaries Expense). Accounts related to assets, liabilities, and equity do not appear on the income statement.
3. Step 3: Analyze each account provided in the problem: Service Revenue, Owner's Capital, Prepaid Insurance, and Accounts Payable. Determine whether each account is related to revenues or expenses.
4. Step 4: Recognize that Service Revenue is a revenue account, which is reported on the income statement. The other accounts (Owner's Capital, Prepaid Insurance, and Accounts Payable) are not revenue or expense accounts and therefore do not appear on the income statement.
5. Step 5: Conclude that the correct account appearing in one of the income statement columns of the worksheet is Service Revenue, as it directly contributes to the calculation of net income.