Sally Lawn Services has a formal agreement with Mr. Bizza to treat his lawn on October 31 and November 30, 2021. The date of the agreement was October 1, 2021. The agreed upon cost of the total service is $ 1,000, $250 to be paid on October 31 and the remaining $750 to be paid on November 30. Although not required as part of the agreement, Mr. Bizza made an advance payment of $500 to Sally Lawn Services on October 1, 2021. Assuming Sally Lawn Services uses the accrual basis of accounting, Sally Lawn Services should record deferred revenue of $250 on October 31. True False
Sally Lawn Services has a formal agreement with Mr. Bizza to treat his lawn on October 31 and November 30, 2021. The date of the agreement was October 1, 2021. The agreed upon cost of the total service is $ 1,000, $250 to be paid on October 31 and the remaining $750 to be paid on November 30. Although not required as part of the agreement, Mr. Bizza made an advance payment of $500 to Sally Lawn Services on October 1, 2021. Assuming Sally Lawn Services uses the accrual basis of accounting, Sally Lawn Services should record deferred revenue of $250 on October 31. True False
Chapter15: Property Transactions: Nontaxable Exchanges
Section: Chapter Questions
Problem 51P
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Question
Transcribed Image Text:Sally Lawn Services has a formal agreement with Mr.
Bizza to treat his lawn on October 31 and November
30, 2021. The date of the agreement was October
1, 2021. The agreed upon cost of the total service is $
1,000, $250 to be paid on October 31 and the
remaining $750 to be paid on November 30. Although
not required as part of the agreement, Mr. Bizza made
an advance payment of $500 to Sally Lawn Services on
October 1, 2021. Assuming Sally Lawn Services uses
the accrual basis of accounting, Sally Lawn Services
should record deferred revenue of $250 on October
31. True False
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