On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue? a. May 5 (date of phone call). b. May 7 (date of service). c. May 10 (date of cash receipt). d. Evenly over the three dates.

Question

On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue?
a. May 5 (date of phone call).
b. May 7 (date of service).
c. May 10 (date of cash receipt).
d. Evenly over the three dates.

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