On Time Computer Repair Uses Accrual Basis Accounting

question 208

Multiple Choice

On Time Computer Repair uses accrual basis accounting.A computer was repaired on July 15.The customer picked up the computer on August 1 and mailed the payment on August 5.On Time Computer Repair received the check in the mail on August 10.The revenue should be recognized on which date?

• A)July 15
• B)August 1
• C)August 5
• D)August 10

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Definitions:

Statement Of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations, financial investments, and external financing, as well as all cash outflows that pay for business activities and investments during a given period.

Accounts Receivable

Money owed to a company by its customers for goods or services delivered but not yet paid for.

Inventory

Goods and materials that a business holds for the ultimate goal of resale, production, or utilization in manufacturing.

Net Cash

The difference between cash inflows and outflows within a given period.