Question

Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Zupan's law firm prepares monthly financial statements, when should it recognize revenue from this engagement? The law firm should recognize the revenue in________

Answer 1

Answer:

The month of April

Explanation:

Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Zupan's law firm prepares monthly financial statements, the law firm should recognize the revenue in April because according to revenue recognition principle, revenue should be recognized in the accounting period in which services are performed, and Susan zupan performed the work in April so therefore the firm should recognize the revenue in April.