Question

Tyler operates a catering service on the accrual method. In November of year 1 Tyler received a payment of $10,800 for 18 months of catering services to be rendered from December 1st of year 1 through May 31st year 3. When must Tyler recognize the income if his accounting methods are selected to minimize income recognition?

$10,800 is recognized in year 3.

$10,800 is recognized in year 1.

$600 is recognized in year 1, $7,200 in year 2, and $3,000 in year 3.

$600 is recognized in year 1 and $10,200 in year 2.

$3,000 is recognized in year 1 and $7,800 in year 2.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *