Wong's Tune-Up Shop uses the cash basis of accounting.Wong services a car on May 31.The customer picks up the vehicle on June 1 and mails payment to Wong on June 5.Wong receives the cheque in the mail on June 6.When would Wong recognize the revenue as being earned?

Question

Quizplus · Accepted Answer

Under the cash basis of accounting, revenue is recognized when cash is received. Therefore, Wong would recognize the revenue on June 6 when the cheque is received.

Wong's Tune-Up Shop Uses the Cash Basis of Accounting