Which of the following accounts would typically appear on an income statement?

• A. Common stock and retained earnings
• B. Sales revenue and wage expense
• C. Accounts payable and notes payable
• D. Cash and accounts receivable

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the purpose of the income statement. The income statement reports a company's financial performance over a specific period, focusing on revenues and expenses to calculate net income.
2. Step 2: Identify the types of accounts that appear on the income statement. These are primarily revenue accounts (e.g., sales revenue) and expense accounts (e.g., wage expense).
3. Step 3: Recognize that accounts like common stock and retained earnings are equity accounts, which appear on the statement of stockholders' equity or balance sheet, not the income statement.
4. Step 4: Note that accounts payable and notes payable are liabilities, and cash and accounts receivable are asset accounts; both types appear on the balance sheet, not the income statement.
5. Step 5: Conclude that the accounts typically appearing on the income statement are those related to revenues and expenses, such as sales revenue and wage expense.