During June,The Grass Is Greener Company mows 100 lawns a week and is paid in July by those customers.The company uses the accrual basis of accounting.How will these events affect the company's financial statements?

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenues are recognized when earned, not when received. Since the company performed the mowing services in June, it would recognize the income in June, affecting the income statement for that month.

During June,The Grass Is Greener Company Mows 100 Lawns a Week