The following information pertains to Sooner Company: Assuming that Sooner Company uses accrual-basis accounting,when would the company record the expense related to the supplies?
$$\begin{array} { | l | l | }
\hline \text { May } 1 & \text { Customer ordered an installation service to be done by Sooner Compary on May } 15 . \
\hline \text { May } 2 & \text { Customer paid cash for the installation job to be done on May } 15 . \
\hline \text { May } 8 & \text { The Sooner Company purchased installation supplies on account for the job. } \
\hline \text { May } 15 & \text { The installation job was started and completed. } \
\hline \text { May } 20 & \text { Amount owed for supplies purchased on May } 8 \text { is paid. } \
\hline
\end{array}$$

Question

The following information pertains to Sooner Company: Assuming that Sooner Company uses accrual-basis accounting,when would the company record the expense related to the supplies?
$$\begin{array} { | l | l | } 
\hline \text { May } 1 & \text { Customer ordered an installation service to be done by Sooner Compary on May } 15 . \
\hline \text { May } 2 & \text { Customer paid cash for the installation job to be done on May } 15 . \
\hline \text { May } 8 & \text { The Sooner Company purchased installation supplies on account for the job. } \
\hline \text { May } 15 & \text { The installation job was started and completed. } \
\hline \text { May } 20 & \text { Amount owed for supplies purchased on May } 8 \text { is paid. } \
\hline
\end{array}$$

Quizplus · Accepted Answer

Under accrual-basis accounting, expenses are recorded when they are incurred, not when they are paid. The expense related to the supplies would be recorded on May 15, the date the installation job was completed and the supplies were used.

The Following Information Pertains to Sooner Company: Assuming That Sooner