During November 2013,Asler Inc.performs consulting services.The client does not pay Asler until January,2014.
A)Using the accrual basis of accounting,the revenue is reported in January 2014.
B)Using the cash basis of accounting,the revenue is reported in November 2013.
C)Using the accrual basis of accounting,the revenue is reported in November 2013.
D)Using the accrual basis of accounting,the revenue is reported when Asler's expenses are paid.

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenue is recognized when it is earned, regardless of when the payment is received. Therefore, the revenue is reported in November 2013 when the services are performed.