Duguay Designers took a $1,500 deposit from a customer when they signed the contract to paint the customer's residence. It took them three weeks to complete the job. On completion the customer paid the $3,500 balance. How should Duguay Designers recognize revenue for this job?
A) The $1,500 as revenue when it is received, and the $3,500 as revenue when it is received.
B) The $1,500 as unearned revenue and the $3,500 as revenue when it is received.
C) $1,667 a week during the painting period.
D) $5,000 as revenue at the completion of the project.

Question

Quizplus · Accepted Answer

Revenue should be recognized when the service is completed. Therefore, the entire $5,000 should be recognized as revenue at the completion of the project.

Duguay Designers Took a $1,500 Deposit from a Customer When