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If a company incorrectly records cash received for services to be provided in the future with a debit to cash and a credit to sales revenue, how will this error affect net income for the current period?.

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The error will affect net income for the current period in such a way that Net Income will be too high.

Net Income: The amount earned by an individual or business after costs, allowances, and taxes is referred to as net income. Net income in the company is the amount that remains after all costs, such as salaries and wages, the cost of goods or raw materials, and taxes, have been paid.

Revenue will be inflated instead of liabilities. The current period's larger net income will result from an overestimation of revenue. On the other side, liabilities are overestimated. Entry to cash is precisely done and it will not affect owing to this inaccuracy. So, the net income will be excessive.

Net Income will be too high.

To learn more about the overestimation of revenue. , visit the following link:

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