The following events pertain to Bills Company: Using accrual-basis accounting,on which date should Bills Company record revenue for the accounting and tax services?
$\begin{array}{|l|l|}
\hline \text { December } 28,2018 & \begin{array}{l}
\text { Bills was contacted by a customer for possible accounting and } \
\text { tax services. }
\end{array} \
\hline \text { December } 30,2018 & \begin{array}{l}
\text { Bills signed a formal agreement with the customer to provide } \
\text { accounting and tax senvices in } 2019 .
\end{array} \
\hline \text { January } 4,2019 & \begin{array}{l}
\text { The customer paid } \$ 1,000 \text { in advance tor the services to be } \
\text { provided by Bills Company. }
\end{array} \
\hline \text { January } 11,2019 & \text { Bills provided accounting and tax services to the customer. } \
\hline
\end{array}$
A)December 30,2018.
B)December 31,2018.
C)January 4,2019.
D)January 11,2019.

Question

Quizplus · Accepted Answer

Under accrual-basis accounting, revenue is recognized when the service is performed, regardless of when payment is received. Therefore, Bills Company should record revenue on January 11, 2019, when the accounting and tax services were actually provided to the customer.

The Following Events Pertain to Bills Company: Using Accrual-Basis Accounting,on