"Customers are billed when serviced and settle their accounts in the following month."

I am supposed to construct an income statement for three straight months but I do not know where to put the revenue. So for instance the company made $15,000 in revenue for April, would this go on the income statement dated April 31st OR would it go into the income statement for May because the directions say 'the accounts are settled in the following month'

Thanks! :)

If you're using the accrual basis then the revenues and expenses are matched to the time periods where the actual revenue/expense items were incurred.
You wouldn't use the entire 15,000 for Apr unless the whole amount were earned in that period.
If you were using the cash basis those items would be recognized when they were incurred regardless of whether they were incurred from some other period. Be sure you know which basis is being used. It makes a BIG difference.

In this scenario, it seems like the company is using the accrual basis for accounting. According to the information provided, customers are billed when serviced, but they settle their accounts in the following month.

To construct an income statement for three straight months, you will need to consider the timing of revenue recognition based on the accrual basis.

In this case, if the company made $15,000 in revenue for April, you would not put the entire $15,000 on the income statement dated April 31st. Instead, you would recognize the revenue in the appropriate month when it was actually earned.

To determine the appropriate month for revenue recognition, you would need more information about when the services were actually provided. If the services were provided and completed in April, then the revenue should be recognized in April, regardless of when the customer settles their accounts.

However, if the services were provided and completed in May, even though the customer was billed in April, the revenue should be recognized in May, as that is when it was earned based on the accrual basis.

It's important to understand whether your company is using the accrual basis or cash basis for accounting, as this will affect the timing of revenue recognition and the construction of your income statement. Be sure to check with your company's accounting policies or consult with a professional accountant to ensure accurate reporting.