Answer:
a. The Date on which Revenue was earned is April 2.
The Cash was received on March 3 and Revenue was earned on April 2 so no the earnings were not received on the same date the cash was received.
b. The date revenue was earned was February 28.
The Cash was received on the February 28 and the Services were given on the February 28. So yes the earnings occur the same date the cash was received.
Explanation:
a.
To understand this let us create a Journal Entry for the transaction on March 3 first:
Debit: Cash $1,000
Credit: Services Payable $1,000
To record cash earned from the services payable.
At this time Momentu Occasions have earned the Cash but it cannot be recorded as revenue as the services are still a liability which are yet to be given.
Now lets record the Journal Entry from April 2:
Debit: Services Payable $1,000
Credit: Service Revenue $1,000
To record Revenue earned.
Now the Services Payable account will be canceled out and the revenue entry will be generated. Hence we can come to conclusion and drive our answers from it;
b.
For Sophomore Class the Journal entry can be recorded as follows on the February 28:
Debit: Cash $4,100
Credit: Service Revenue $4,100
To record Service given at Cash.
