Question

Homework: Chapter 3 Homework Save Score: 0 of 1 pt 1 of 5 (0 complete) HW Score: 0%, 0 of 5 pts E3-18 (book/static) Question Help O 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 dass 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 Our on the same date cash was received The recognition Requirements Answer the following questions about the correct way to account for revenue under the accrual basis: Considering the $1,000 paid by the freshman class, on what date was revenue recognized? Did the recognition occur on the same date cash was received? Considering the $4,100 paid by the sophomore class, on what date was revenue recognized? Did the recognition occur on the same date cash was received? Print Done

Answer 1

Revenue Under Accrual Basis:

As per accrual basis, revenue is recognized on the income statement when it is earned,not necessarily when cash is received from customers.

A)  Considering the $1000 paid by the freshman class, the revenue was recongnized on April,2. The recongnition did not occur on the same date cash was received.

B) Considering the $4,100 paid by the sophomore class, the revenue was recongnized on february 28. The recognition did occur on the same date cash was received.