Income for 2018 is $300, 2019 income is $900, and 2020 income is nil.

Question

Quizplus · Accepted Answer

The accrual method recognizes revenue when it is earned, regardless of when payment is actually received. In this case, the income of $300 in 2018 and $900 in 2019 would both be recognized as earned revenue under the accrual method, even if payment was not received until a later date. The fact that there is no income in 2020 does not impact the choice of accounting method.

Income for 2018 Is $300, 2019 Income Is $900, and 2020