Under accrual accounting, revenue is recorded:
(a) when the service is provided and cash has been received
(b) when cash is received without regard to when the service is provided
(c) when the service is provided and collection of cash is reasonably certain
The correct answer is :
(c) when the service is provided and collection of cash is reasonably certain.
Note:
Under accrual accounting revenue is recorded when the service is rendered. It is not considered whether the payment for the same is immediately received. The certainty to receive the amount is considered while recording the revenue.
Under accrual accounting, revenue is recorded: (a) when the service is provided and cash has been...
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