During June,the Grass Is Greener Company mows 100 lawns a week;the company bills customers and full payment is due by July 15.The company uses the accrual basis of accounting.How will these events affect the company's financial statements?

Question

Quizplus · Accepted Answer

When a sale occurs or a service is provided before cash is received,an asset account (Accounts Receivable)increases and a revenue account (Service Revenue)increases at the time the sale occurs or the service is provided.At a later date,when cash is received,an asset account (Cash)will increase and another asset account (Accounts Receivable)will decrease.

During June,the Grass Is Greener Company Mows 100 Lawns a Week;the