When does a company account for revenue if it uses cash basis accounting? A. when the services are being performedB. when services are performed, even though cash may be received at a later dateC. when cash is received, either prior to, at the time of, or after the services are performedD. before services are performed

Question

Dayanara Torres

Business

30 January, 18:28

When does a company account for revenue if it uses cash basis accounting? A. when the services are being performedB. when services are performed, even though cash may be received at a later dateC. when cash is received, either prior to, at the time of, or after the services are performedD. before services are performed

+1

Answers (1)

Know the Answer?

Shane Robinson · Answer 1

C. when cash is received, either prior to, at the time of, or after the services are performed

Explanation:

Under the cash basis accounting, the revenue is recognized at the time when the cash is received. It can be at the time before the service performed or after the service is performed. It only involves cash transactions.

The cash basis of accounting reports the revenue earned and the expenses incurred that occurred in cash transactions only.