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 by mail on January 5. As per the revenue recognition principle, the related account that should appear on the balance sheet as of December 31 is:
A)Prepaid Expense.
B)Accounts Receivable.
C)Unearned Revenue.
D)Accounts Payable.

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when it is earned, regardless of when payment is received. In this case, Robert performed accounting services in December, which means that the revenue was earned in December, and thus it should be recorded as accounts receivable as of December 31.

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