Question

The following transactions occurred during July: Received $970 cash for services provided to a customer during July. Received $3,400 cash investment from Bob Johnson, the owner of the business. Received $820 from a customer in partial payment of his account receivable which arose from sales in June. Provided services to a customer on credit, $445. Borrowed $6,700 from the bank by signing a promissory note. Received $1,320 cash from a customer for services to be performed next year. What was the amount of revenue for July

Answer 1

Answer: $1,415

Explanation:

Going by the Accrual principle in Accounting, the revenue to be recognized has to be for services rendered in the period of interest regardless of it is in cash or on account.

The revenue transactions for the month of July therefore will be for only services rendered in July.

Those include;

• Received $970 cash for services provided to a customer during July.

• Provided services to a customer on credit, $445

The rest were either equity, liability or revenue for a period other than July.

Revenue for July is therefore;

= 970 + 445

= $1,415