Question

On November 15, Meier Company received $3,000 cash from a customer for services that were performed on November 1. On which date should the revenue be recorded under cash-basis accounting?

a.November 1.
b.November 15.
c.One-half on each date.
d.Neither.

Answer 1

In cash-basis accounting, revenue is recorded when cash is received. Meier Company should record the revenue on November 15, the date they received the cash for services performed.

Step-by-step explanation:

Under cash-basis accounting, revenue is recorded when cash is received. Therefore, Meier Company should record the revenue on the date the cash was received. In this scenario, Meier Company received the cash on November 15, so this is the date when the revenue should be recorded according to cash-basis accounting principles.