Question

Monster music company provided music lessons to customers for $10,000, receiving $6,000 in cash and the rest on account. what is monster music company's revenue under the accrual basis of accounting?

Answer 1

The monster music company's revenue under the accrual basis of accounting is $10,000

What is the accrual basis of accounting?

Under  the accrual basis of accounting, revenue is recognized when the goods have been delivered or services rendered regardless of when payment for goods or services is received.

The fact that Monster music company already provided the music lessons whose revenue is $10,000 means that it  should recognize the revenue for the whole music lessons provided rather the portion whose cash payment has been received

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