On September 1, Boz sold to Skaggs prepaid maintenance for $6,000 for six months. As of December 31, what is the amount that is applied toward net income?

Name: On September 1, Boz sold to Skaggs prepaid maintenance for $6,000 for six months. As of December 31, what is the amount that is applied toward net income?
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Question

Quizplus · Accepted Answer

By December 31, four months of the six-month prepaid maintenance period have passed. Therefore, $4,000 (4/6 of $6,000) is recognized as income.

On September 1, Boz Sold to Skaggs Prepaid Maintenance for $6,000