Consider the following events for Sophia Incorporated: Under cash-basis accounting,what is the appropriate day to record the revenues related to the sand volleyball camp?

Question

Consider the following events for Sophia Incorporated:  Under cash-basis accounting,what is the appropriate day to record the revenues related to the sand volleyball camp?

Quizplus · Accepted Answer

The revenues related to the sand volleyball camp should be recorded on the day the camp begins, which is April 12. This is because under cash-basis accounting, revenues are recognized when cash is received or when services are provided, whichever comes first. In this case, the services (the camp) are being provided starting on April 12, so that is when the revenues should be recorded.

Consider the Following Events for Sophia Incorporated: Under Cash-Basis