Protect provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job i
s finished. Some customers ask that the business send them a bill. As of the end of the year, Protect has collected $500 from cash paying customers. Protect's remaining customers owe the business $1,200. How much service revenue would Protect have for the year under:
In the cash basis system of accounting, revenue is recognized once cash has been collected while under accrual basis, revenue is collected once it is earned irrespective of whether cash has been collected or not.
Expenses are recorded when cash is paid in the cash basis system while expenses are recorded once it is incurred under the accrual system of accounting.
Hence
Cash basis - revenue earned is $500 for the year
Accrual basis - revenue earned is $1700 ( the sum of the amount paid and owed by the customer).
A customer who sold a bond at a loss must wait how long before he can buy back a substantially identical bond and not have the sale classified as a wash sale? 30 days.
