Robert Rogers,CPA performed accounting services for a client in December.A bill was mailed to the client on December 30.Roberts received a check in the mail on January 5.The revenue principle would require that which of the following accounts appear on the income statement for the year ended December 31?
A) Service revenue
B) Unearned revenue
C) Accounts payable
D) Prepaid expense

Question

Quizplus · Accepted Answer

According to the revenue principle, revenue is recognized when it is earned, regardless of when payment is received. As Robert performed accounting services for the client in December, service revenue should be recognized on the income statement for the year ended December 31. Unearned revenue would only arise if Robert received payment in advance for services not yet performed, which is not the case here. Accounts payable and prepaid expense are balance sheet accounts and not relevant to the income statement.

Robert Rogers,CPA Performed Accounting Services for a Client in December