Under accrual accounting,fees received in advance from customers should be shown as being earned:
A)When cash is collected.
B)When services are performed or goods delivered.
C)When tax rates are low.
D)When tax rates are high.

Question

Quizplus · Accepted Answer

Under accrual accounting, revenue is recognized when services are performed or goods are delivered, regardless of when payment is actually received. Therefore, fees received in advance should be recognized as earned revenue when the services are provided or goods are delivered to the customer.

Under Accrual Accounting,fees Received in Advance from Customers Should Be