Camper City started business on January 1, 2013. Stanton performed services for customers totaling $250,000 of which 40% remain uncollected at the end of December. Under the accrual basis, what amounts would appear on the company's financial statements for 2013? Income Statement Statement of Cash Flows

Question

Quizplus · Accepted Answer

Under the accrual basis, revenue is recognized when it is earned, regardless of when it is collected. Therefore, Camper City would record $250,000 as revenue on their income statement for the year. However, since 40% of that amount remains uncollected at the end of the year, only $150,000 would appear on the statement of cash flows as cash received from customers. Therefore, the correct answer is A.

Camper City Started Business on January 1, 2013