Wong's Tune-Up Shop Limited 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. Wong receives the payment on June 6, so that is when the revenue is recognized.

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