Enoch,Inc.began operations on July 1,2011.On August 1,it received $12,000 in advance for services to be performed evenly over the next 12 months.How much of this revenue should the company report on its income statement for the MONTH ended August 31,2011?

Question

Quizplus · Accepted Answer

The company should recognize 1/12th of the revenue for the month of August since it is to be performed evenly over the next 12 months. Therefore, the revenue recognized for the month of August is $1,000 (12,000/12).

Enoch,IncBegan Operations on July 1,2011