Consider the following events for Sophia Incorporated: April 5 Sophia purchases volleyballs for $200 on account. April 6 Sophia advertises a sand volleyball camp for $20 a person. April 12 Thirty people sign up for the camp paying a total of $600. April 21 Sophia hosts the sand volleyball camp. April 23 Sophia pays for the volleyballs purchased on April 5. Under accrual-basis accounting, what is the appropriate day to record the revenues from the sand volleyball camp?

Question

Guest

Business

30 June, 06:52

Consider the following events for Sophia Incorporated: April 5 Sophia purchases volleyballs for $200 on account. April 6 Sophia advertises a sand volleyball camp for $20 a person. April 12 Thirty people sign up for the camp paying a total of $600. April 21 Sophia hosts the sand volleyball camp. April 23 Sophia pays for the volleyballs purchased on April 5. Under accrual-basis accounting, what is the appropriate day to record the revenues from the sand volleyball camp?

+3

Answers (1)

Know the Answer?

Petie · Answer 1

April 21

Explanation:

According to the accrual-basis accounting, transactions are recorded in the periods in which the events occur.

Companies recognize revenues when they perform services, rather than when they receive cash. Expenses are recognized when incurred, rather than when paid.

This principal is in accordance with generally accepted accounting principles (GAAP).

In this case, the service was performed in April 21.