A Dance Studio Accepts $1,500 to Provide a Series of Dance

question 57

Multiple Choice

A dance studio accepts $1,500 to provide a series of dance lessons to a youth group during the month of July.The studio decides to record the revenue in July.The studio incurs rent,utilities,and salaries expenses in July.The studio decides to record those expenses in August,when it pays for them.One or both of these decisions:

• A)violate the expense recognition principle.
• B)are an example of accrual accounting.
• C)violate the revenue recognition principle.
• D)violate both the expense recognition and revenue recognition principles.

---

Definitions:

Rent Controls

Government-imposed limits on the amount landlords can charge for renting out their property, typically aimed at making housing more affordable.

Rental Units

Rental units refer to properties available for rent, including apartments, houses, and commercial spaces, which provide housing or operational space for tenants.

Actual Price

The price at which a good or service is sold, reflecting current market conditions and agreed upon by buyers and sellers.

Rent Controls

Government-imposed limits on the rent landlords can charge tenants.