During November 2017,Asler,Inc.,performs consulting services.The client does not pay Asler until January 2018.
A)Using the accrual basis of accounting,the revenue is reported in January 2018
B)Using the cash basis of accounting,the revenue is reported in November 2017.
C)Using the accrual basis of accounting,the revenue is reported in November 2017.
D)Using the accrual basis of accounting,the revenue is reported when Asler's expenses are paid.

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenue is recognized when it is earned, regardless of when the payment is received. Since Asler, Inc. performed the services in November 2017, the revenue is reported in November 2017.