If a company is using the accrual basis accounting method,when should it record its earned revenue?
A)when cash is received,even though services may be rendered at a later date
B)when services are rendered,even though cash may be received at a later date
C)when services are completely rendered and cash is received
D)when cash is received,30 days after the completion of the services

Question

Quizplus · Accepted Answer

Under the accrual basis accounting method, revenue should be recorded when it is earned, which is when services are rendered or goods are delivered. It is not dependent on the timing of cash receipt. Therefore, option B is correct as it records revenue based on the completion of services or delivery of goods, regardless of whether cash is received immediately or at a later date.

If a Company Is Using the Accrual Basis Accounting Method,when