On Time Computer Repair Uses Accrual Basis Accounting

question 48

Multiple Choice

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

• A) May 15
• B) August 1
• C) June 5
• D) June 10

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Definitions:

Possession

In law, it refers to the actual holding or control of property, whether owned or not.

Perfect

To complete or make flawless, often used in legal terms to describe the act of finalizing a security interest in accordance with the law.

Security Interest

A legal claim or lien on collateral that gives a lender the right to repossession if the borrower defaults on obligations.

Default

Failing to fulfill a legal obligation or agreement, particularly the failure to repay a loan as agreed with a lender.