Revenue Recognition and Expense Recognition Video Lessons

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Problem: Consider the following events for B Company: June 1     Purchased gasoline for $200 on account June 7     Advertised lawn mowing for $100 per lawn June 9     Signed up 8 customers and received $800 in cash June 12   Mowed 8 lawns, using up all the gasoline purchased on June 1 June 13   Paid for the gasoline Under accrual-basis accounting, what is the appropriate day to record the revenues related to lawn services? a) June 1. b) June 7. c) June 9. d) June 12.

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Problem Details

Consider the following events for B Company:

June 1     Purchased gasoline for $200 on account
June 7     Advertised lawn mowing for $100 per lawn
June 9     Signed up 8 customers and received $800 in cash
June 12   Mowed 8 lawns, using up all the gasoline purchased on June 1
June 13   Paid for the gasoline

Under accrual-basis accounting, what is the appropriate day to record the revenues related to lawn services?

a) June 1.

b) June 7.

c) June 9.

d) June 12.

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What scientific concept do you need to know in order to solve this problem?

Our tutors have indicated that to solve this problem you will need to apply the Revenue Recognition and Expense Recognition concept. You can view video lessons to learn Revenue Recognition and Expense Recognition. Or if you need more Revenue Recognition and Expense Recognition practice, you can also practice Revenue Recognition and Expense Recognition practice problems.

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Our tutors rated the difficulty ofConsider the following events for B Company: June 1     Pur...as medium difficulty.