Austin Insurance (AI)earned $10,000 revenue for services provided.Which of the following is correct?
A)AI would credit Accounts Receivable,regardless of the timing of cash receipts.
B)AI would credit Accounts Receivable,but only if cash has not been received.
C)AI would credit Revenue,regardless of the timing of cash receipts.
D)AI would credit Revenue,but only if cash has been received.

Question

Quizplus · Accepted Answer

The revenue earned by Austin Insurance is recognized as revenue regardless of the timing of cash receipts, so the correct answer is to credit Revenue. Therefore, options A and B are incorrect because they suggest that the transaction is related to Accounts Receivable. Option D is also incorrect because revenue would still be credited even if cash has not been received yet.

Austin Insurance (AI)earned $10,000 Revenue for Services Provided