During May,2018,Sugar Inc.performs consulting services.The client does not pay Sugar until June,2018.
A)Using the accrual basis of accounting,the revenue is reported in June 2018.
B)Using the cash basis of accounting,the revenue is reported in May 2018.
C)Using the accrual basis of accounting,the revenue is reported in May 2018.
D)Using the accrual basis of accounting,the revenue is reported when Sugar's expenses are paid.

Question

Quizplus · Accepted Answer

Accrual basis accounting reports revenues when the performance obligation is satisfied;the revenue would be recorded during May 2018.Cash basis accounting records revenues and expenses when cash is received and paid;the revenue would be recorded during June 2018.