On December 31, 2019, a Company Signed a One-Year Contract

question 162

Multiple Choice

On December 31, 2019, a company signed a one-year contract to provide services to a particular customer for $12,000. The customer will pay for the services during January 2020. Using the accrual basis of accounting, when should the company recognize revenue?

• A)In January 2020, when the cash is received.
• B)On December 31, 2020, after all services have been provided.
• C)Equally throughout 2020, as the revenue is earned.
• D)On December 31, 2019, when the contract is signed.