A Pool Cleaning Service Signs a Contract with a New

question 203

Multiple Choice

A pool cleaning service signs a contract with a new customer on May 1.The pool is vacuumed and "shocked" for the customer on June 1,and the bill for the services is paid on July 1.Under the accrual basis,the business should recognize revenue on

• A)December 31.
• B)July 1.
• C)June 1.
• D)May 1.

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Definitions:

Contract Law

The body of law governing the formation, execution, and enforcement of contracts between parties.

Fair Bargain

A deal or agreement that is considered equitable and satisfactory to all parties involved.

Full Satisfaction

The complete fulfillment of an obligation or payment in a manner that fully satisfies the terms agreed upon.

Debt

An obligation owed by one party, the borrower, to a second party, the lender; typically involving borrowed money that is expected to be paid back with interest.