Question

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Momentous Occasions is a photography business that shoots videos at college parties. The freshman class pays $1,000 in advance on March 3 to guarantee services for its party to be held on April 2. The sophomore class promises a minimum of $2,800 for filming its formal dance and actually pays cash of $4,100 on February 28 at the dance. Read the requirements. a. Considering the $1,000 paid by the freshman class, the revenue was recognized The recognition occur on the same date cash was received. [ The recognition The recognition b. Considering the $4,100 paid by the sophomore class, the revenue was recognized occur on the same date cash was received.

Answer 1

Answer:

Cash and accrual basis accounting and applying the revenue recognition principle:

• Under the cash basis accounting system,the costs are recorded in the books of records just when cash is paid for it during a specific bookkeeping or accounting year. Moreover the revenues are recorded just when money is gotten or received for it.
• under the accrual premise accounting framework ,the costs caused or due yet not yet paid are considered as operational expense for the current year.Likewise the pay earned however not yet got is considered as the business for the present year.
• under the revenue recognition principle,the revenue ought to be recorded on the date when it is earned by the business ;that is the point at which the merchandise are moved or benefits are given to the clients ,regardless of whether money is gotten from the clients or not.

a)

• MO business shoot recordings for college parties .The class pays $1,000 ahead of time on march 3 to give administrations to the gathering to be hung on April 2 .
• MO business should record the income on the date when it is earned by the business as the gathering is hung on April 2 on the business will give benefits on that date. subsequently the date of income earned is April 2 .
• No, the profit didn't happen on a similar date of money got on march 3 and the income is recorded on April 2 on the date the administration was performed.

b)

• MO business shoot recordings for college parties . The class guarantees at least $2,800 for acquiring as formal move and really pays money of $4,000 on February 28 at the party .
• MO business should record the revenue on the date when it is earned by the business as the gathering is hung on February 28 on the business will give benefits on that date. henceforth the date of income earned February 28 .
• Yes ,the income or revenue has happened on a similar date of money got as a similar date of money got and administration performed are the equivalent on February 28.