On January 17, Papa’s Pizza signs a contract with Bug Zappers for exterminating services related to a recent sighting of cockroaches in the restaurant. Papa’s pays for the extermination service on January 29, and Bug Zappers sprays for bugs on February 7. On which date should Papa’s Pizza record the extermination expense? a. January 17 (date of the contract). b. January 29 (date of cash payment). c. February 7 (date of extermination service). d. Evenly over the three dates.
On January 17, Papa’s Pizza signs a contract with Bug Zappers for exterminating services related to a recent sighting of cockroaches in the restaurant. Papa’s pays for the extermination service on January 29, and Bug Zappers sprays for bugs on February 7. On which date should Papa’s Pizza record the extermination expense? a. January 17 (date of the contract). b. January 29 (date of cash payment). c. February 7 (date of extermination service). d. Evenly over the three dates.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 17, Papa’s Pizza signs a contract with Bug Zappers for exterminating services related to a recent sighting of cockroaches in the restaurant. Papa’s pays for the extermination service on January 29, and Bug Zappers sprays for bugs on February 7. On which date should Papa’s Pizza record the extermination expense?
a. January 17 (date of the contract).
b. January 29 (date of cash payment).
c. February 7 (date of extermination service).
d. Evenly over the three dates.
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