During 2019,Ocean Consulting had the following transactions with it clients (customers): On February 1,2019,the company received cash of $10,000 from clients in payment of their account balances as of December 31,2018.
On November 1,2019,the company received $4,000 cash as payments in advance for services to be performed in 2020.
The company received a total of $26,000 in cash for services that were performed during 2019.
The company sent bills totaling $8,000 to clients for services performed during 2019;this amount was unpaid as December 31,2019.
What is the amount of Service Revenue that will be reported on the income statement for the year 2019?
A)$38,000.
B)$44,000.
C)$48,000.
D)$34,000.

Question

Quizplus · Accepted Answer

The requirement under accrual basis accounting is to record revenues when the performance obligation is satisfied.This basically means the company has done what it promised to do.Total revenue earned in 2019 = $26,000 + $8,000 = $34,000.

During 2019,Ocean Consulting Had the Following Transactions with It Clients