On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue? a. May 5 (date of phone call). b. May 7 (date of service). c. May 10 (date of cash receipt). d. Evenly over the three dates.
On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue? a. May 5 (date of phone call). b. May 7 (date of service). c. May 10 (date of cash receipt). d. Evenly over the three dates.
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter10A: The Voucher System Of Accounting
Section: Chapter Questions
Problem 2P: Hartman Company, which uses a voucher system, has the following unpaid vouchers on July 1. The firm...
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On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue?
a. May 5 (date of phone call).
b. May 7 (date of service).
c. May 10 (date of cash receipt).
d. Evenly over the three dates.
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