During May,Just in Thyme,Inc.billed a customer $1,000 for services performed during May.During June,Just in Thyme collected the $1,000.Which of the following statements about this transaction is correct?
A) $1,000 of revenue should be recorded in May.
B) $500 of revenue should be recorded in May and $500 in June.
C) $1,000 of revenue should be recorded in June.
D) No revenue should be recorded for these events because they relate only to the balance sheet.

Question

Quizplus · Accepted Answer

The revenue should be recorded in May, the month in which the services were performed and billed. The collection of cash in June does not affect the recognition of revenue in May, as it is not a requirement for revenue recognition.