Rainbow Designers Took a $1,500 Deposit from a Customer When

question 22

Multiple Choice

Rainbow Designers took a $1,500 deposit from a customer when they signed the contract to paint the customer's residence.It took them three weeks to complete the job.On completion the customer paid the $3,500 balance.How should Rainbow Designers recognize revenue for this job assuming the job is performed on one accounting period?

• A)The $1,500 as revenue when it is received,and the $3,500 as revenue when it is received.
• B)The $1,500 as unearned revenue and the $3,500 as revenue when it is received.
• C)$5,000 as revenue at the completion of the project.
• D)The $1,500 as unearned revenue and $5,000 as revenue when the project is completed.

---

Definitions:

Rooting Reflex

An innate reflex in newborns that prompts them to turn their head towards a touch on their cheek, facilitating the baby's search for a nipple to begin feeding.

Infant Son

A young male child in the earliest period of life, typically before he can walk or talk.

Cheek

A part of the face that lies below the eye and between the nose and ear, comprising the outer surface of the sides of the oral cavity.

Developmental Psychology

A branch of psychology that studies physical, cognitive, and social change throughout the life span.