Question

6 Belinda uses an accrual method of accounting and a calendar year. On December 28, 2017,...

6 Belinda uses an accrual method of accounting and a calendar year. On December 28, 2017, she completed work for a client and submitted his bill. The client had no dispute with the work done or the amount of the bill. The client paid Belinda's bill on January 3, 2018. In which year should she report the income from this project?

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Answer #1

Since Bekinda is following the accrual method of accounting this means income and expenses are recorded for,in books of account, in the year which they relates to that it it doesn't matter whether cash has been received from the income. Revenue is recognized in the period in which work has been done. So in the giceb case, client has no dispute with the work done and rhe collection of money is certain, Belinda shall report in come on the statements of year ending December 2017.

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