On December 31, 2013, a Company Signed a One-Year Contract

question 45

Multiple Choice

On December 31, 2013, 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 2014. Using the accrual basis of accounting, when should the company recognize revenue?

• A)In January 2014, when the cash is received.
• B)On December 31, 2014, after all services have been provided.
• C)Equally throughout 2014, as the revenue is earned.
• D)On December 31, 2013, when the contract is signed.

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