On October 31, Michael Corporation signed a one-year contract to provide services to Love Company for $80,000.Love will pay for the services on November 1.Using the accrual basis of accounting, when should Michael Corporation recognize revenue?

Question

Quizplus · Accepted Answer

According to the accrual basis of accounting, revenue should be recognized when it is earned, which occurs when services have been provided to the customer. Therefore, revenue should be recognized throughout the year as the services are provided, rather than waiting until all services have been completed or until the cash is received.

On October 31, Michael Corporation Signed a One-Year Contract to Provide