Consider the following events for Betterment Incorporated:
January 1$\quad$ Betterment purchases gasoline for $\$ 200$ on account.
January 7$\quad$ Betterment advertises lawn mowing services for $\$ 100$ per lawn.
January 9$\quad$ Betterment signs up 8 customers who pay a total of $\$ 800$ cash.
January 12$\quad$ Betterment mows the lawns of the 8 customers and all gasoline purchased on January 1 is used.
January 13 $\quad$Betterment pays for the gasoline purchased on January 1.
Under accrual-basis accounting,what is the appropriate day to record the expenses related to the gasoline?

Question

Consider the following events for Betterment Incorporated: 
January 1$\quad$ Betterment purchases gasoline for $\$ 200$ on account.
January 7$\quad$ Betterment advertises lawn mowing services for $\$ 100$ per lawn.
January 9$\quad$ Betterment signs up 8 customers who pay a total of $\$ 800$ cash.
January 12$\quad$ Betterment mows the lawns of the 8 customers and all gasoline purchased on January 1 is used.
January 13 $\quad$Betterment pays for the gasoline purchased on January 1.
Under accrual-basis accounting,what is the appropriate day to record the expenses related to the gasoline?

Quizplus · Accepted Answer

Under accrual-basis accounting, expenses are recorded when they are incurred. The gasoline expense should be recorded on January 12 when it is used to mow the lawns.

Consider the Following Events for Betterment Incorporated: January 1 \quad

Consider the Following Events for Betterment Incorporated:
January 1 $\quad$