The following transactions occurred during July: a.Received $900 cash for services provided to a customer during July.
b.Received $2,200 cash investment from Barbara Hanson,the owner of the business.
c.Received $750 from a customer in partial payment of his account receivable,which arose from sales in June.
d.Provided services to a customer on credit,$375.
e.Signed a promissory note for a $6,000 bank loan.
f.Received $1,250 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?
A)$900
B)$1,275
C)$2,525
D)$3,275
E)$11,100

Question

Quizplus · Accepted Answer

Revenue is recognized when services are provided, not when cash is received. Transactions a, c, d, and f all relate to the receipt of cash but not the provision of services in July. Therefore, the only transaction that generates revenue is transaction b, which is a cash investment and not revenue. Thus, the total revenue for July is $0.

The Following Transactions Occurred During July: A