Sparkling Pools provides $1,000 of pool maintenance services during July and collects payment in August.The company performs $1,600 of pool maintenance services during July that were paid for in June.The company accepts an order to perform $500 of pool maintenance services in August and will be paid in the same month.Revenue should be credited for:
A)$1,600 in June,$1,000 in July,and $500 in August.
B)$1,600 in June,$0 in July,and $1,500 in August.
C)$0 in June,$1,600 in July,and $1,500 in August.
D)$0 in June,$2,600 in July,and $500 in August.

Question

Quizplus · Accepted Answer

Revenue is recognized when earned, not when payment is received or made. Thus, $1,600 + $1,000 in July when services were performed, and $500 in August for the services to be performed then.

Sparkling Pools Provides $1,000 of Pool Maintenance Services During July