Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q. 3-2SE-b

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 157

Short Answer

Protection Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Protection Home has collected $900 from cash-paying customers. Protection Home’s remaining customers owe the business $1,300. How much service revenue would Protection Home have for the year under the a. cash basis? b. accrual basis?

Service revenue equals $2,200.

See the step by step solution

Step by Step Solution

Explanation on Accrual Basis Accounting

Under this method, revenues and expenses are recorded on the basis of revenue earned and expenses incurred.

Calculation of Service Revenue

In the given case, company has not received $1,300 from the customers, hence total service revenue will include amount received and outstanding amount.

Calculation of service revenue:

Thus, service revenue is $2,200.

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.