Robert Rogers, CPA, performed accounting services for a client in December. A bill was mailed to the client on December 30. Roberts received the client's check by mail on January 5. Which of the following accounts should appear on the income statement for the year ended December 31 as per the revenue recognition principle?
A)Service Revenue
B)Unearned Revenue
C)Accounts Payable
D)Prepaid Expense

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when the goods or services are delivered, regardless of when payment is received. In this case, Robert Rogers performed accounting services in December, so the revenue should be recognized in December, regardless of when the client paid. Therefore, the correct account to appear on the income statement for the year ended December 31 would be Service Revenue.

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