Colbert operates a catering service on the accrual method. In November of year 1, Colbert received a payment of $9,000 for 18 months of catering services to be rendered from December 1st of year 1 through May 31st of year 3. When must Colbert recognize the income if he elects to minimize income recognition in each year that is applicable? Multiple Choice $500 is recognized in year 1 and $8,500 in year 2. $2,500 is recognized in year 1 and $6,500 in year 2. $9,000 is recognized in year 3. $500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3. $9,000 is recognized in year 1.
Colbert operates a catering service on the accrual method. In November of year 1, Colbert received a payment of $9,000 for 18 months of catering services to be rendered from December 1st of year 1 through May 31st of year 3. When must Colbert recognize the income if he elects to minimize income recognition in each year that is applicable? Multiple Choice $500 is recognized in year 1 and $8,500 in year 2. $2,500 is recognized in year 1 and $6,500 in year 2. $9,000 is recognized in year 3. $500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3. $9,000 is recognized in year 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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