A university student registers for classes and pays the tuition with a credit card. Because it uses accrual-basis accounting, the college will recognize the payment as revenue as soon as the transaction turns into cash in the school's bank account.

Question

Quizplus · Accepted Answer

The college will recognize the revenue as soon as the classes are actually attended by the student, not when the credit card payment is received. This is because the college operates on an accrual-basis accounting system, which recognizes revenue when it is earned, not when the payment is received.

A University Student Registers for Classes and Pays the Tuition