The following transactions for the month of March have been journalized and posted to the proper...
Question:
The following transactions for the month of March have been journalized and posted to the proper accounts.
- Mar. 1 Martinez invested $9,000 cash in his new design services business.
- Mar. 2 Paid the first month's rent of $800
- Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $5,000
- Mar. 4 Purchased office supplies for $750 cash
- Mar. 5 Billed a client for $10,000 of design services completed
- Mar. 6 Received $8,000 on account for the services previously recorded.
What is the ending balance in the Service Revenue account?
a. $19,000
b. $9,000
c. $10,000
d. $8,000
Revenue Recognition
Revenues are recognized for the period is when the revenue actually occurred. Payment received for the revenue is not consider for recognizing the revenue.
Answer and Explanation: 1
c.$10,000
Here, the all entry other than on March 5 is not related to revenue.They include investment in business, payment of expenses, purchase and collection from customer.
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What is Revenue Recognition? - Principles, Process & Examples
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Revenue recognition states that revenue is recorded when it is realized, or realizable and earned, as opposed to received. Learn about the principles and process of revenue recognition with examples of recognition criteria before exploring some exceptions to the rule.
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