During June, Thuy Bui’s business performed services for a specific customer for which the fee was $5,000. Payment was received in the following month July. Required: Was the revenue earned in June or July? How is profit determined under the cash basis of accounting and the accrual basis of accounting? What journal entries should be recorded under accrual accounting in June and July What journal entries should be recorded under cash accounting in June and July?

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter3: Basic Accounting Systems: Accrual Basis
Section: Chapter Questions
Problem 1SEQ: Assume that a lawyer bills her clients $15000 on June 30, for services rendered during June. The...
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During June, Thuy Bui’s business performed services for a specific customer for which the fee was $5,000. Payment was received in the following month July.

Required:

  1. Was the revenue earned in June or July? How is profit determined under the cash basis of accounting and the accrual basis of accounting?

  2. What journal entries should be recorded under accrual accounting in June and July

  3. What journal entries should be recorded under cash accounting in June and July?

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