Joseph has been trading for many years as an accountant. At 1 May 2019, his clients owed him £125,000 in unpaid fees. During the year to 30 April 2020, Joseph's clients paid him £800,000 in cash and at the end of his financial year on 30 April 2020 unpaid fees amounted to £150,000. What revenue should Joseph recognize in his statement of profit or loss for the year ended 30 April 2020?

Question

Quizplus · Accepted Answer

Joseph should recognize revenue based on the fees earned during the year, which is calculated as: Opening receivables (£125,000) + Cash received (£800,000) - Closing receivables (£150,000) = £775,000 + £50,000 = £825,000.

Joseph Has Been Trading for Many Years as an Accountant