Chapter 3, Problem 2MCQ

In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of S4,500 for services to be performed in January 2020. Swanstrom also receives the December utility bill for S600 but does not pay this bill until 2020. For 2019, under the accrual basis of accounting, Swanstrom would recognize:

a. $8,000 of revenue and $600 of expense.

b. $8,000 of revenue and $0 of expense.

c. $3,500 of revenue and $600 of expense.

d. $3,500 Of revenue and $0 of expense.