Question

During March, Thuy Bui’s business performed services for a specific customer for which the fee was $9000. Payment was received in the following April.

a) Was the revenue earned in March or April?

b) What journal entries should be recorded under accrual accounting in March and April?

c) What journal entries should be recorded under cash accounting in March and April?

Answer 1

Answer:

A) if accrual method is adopted

Then revenue is for march month

And if cash method is adopted

Then revenue is for april month

B) {accrual method}

March -

Account receivale acc dr. $ 9,000

To sales acc./ Revenue acc $ 9,000

April -

Cash acc dr. $9,000

To Account receivable acc. 9,000

C) {Cash method}

March -

No entry

April -

Cash acc. dr. $9,000

To sales acc. / Revenue Acc. $ 9,000

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