TNT Inc charges $125 per month for a storage unit.In the first quarter of the year,they collected $6,125.Ten customers pre-paid for three months rental in January,seven customers pre-paid for two months rental in February,and five customers paid for one month in March.Using the cash basis of accounting,TNT will recognize ________ in revenue for March and ________ using the accrual basis.

Question

Quizplus · Accepted Answer

Under the cash basis, TNT recognizes revenue when cash is received. In March, five customers paid for one month, totaling $625 (5 x $125). Under the accrual basis, revenue is recognized when earned. In March, revenue from ten customers for January, seven for February, and five for March totals $2,750 (22 x $125).

TNT Inc Charges $125 Per Month for a Storage Unit