Under the accrual basis, revenue is recorded when:

Answer

The service is performed, whether or not cash has arrived

Options - A. The service is performed, whether or not cash has arrived - B. The invoice is sent to the customer, whether or not the work is finished - C. The cash is received from the customer - D. The customer signs the contract for the service Why - A. Correct — revenue is recognised when earned; the school board’s 7,200 is December revenue although only 4,000 was collected. - B. Billing is a document, not performance; a bill sent before the work is done creates no revenue, and work done unbilled is still revenue. - C. Cash receipt is the cash basis; the 24,000 of passes collected in December is almost all unearned. - D. A signed contract is an exchange of promises, not performance; nothing is earned by signing.

Hermanson Vol 1 ch 3 (cash vs accrual; matching); Dauderis & Annand §3.1; OpenStax Accounting Vol 1 §4.1 (concept map D1–D4)