Linda delivers pizzas for a pizza shop.On Wednesday,December 31,2010,Linda made several deliveries and collected $350 from customers.However,Linda forgot to turn in the proceeds for the day to her employer until the following Friday,January 2,2011.The pizza shop owner recognizes the income of $350 when he receives it from Linda in 2011.

Question

Quizplus · Accepted Answer

The income should be recognized when it is earned, not when it is received. Since the deliveries were made on December 31, 2010, the income should be recognized in 2010, not 2011.

Linda Delivers Pizzas for a Pizza Shop