Shadow's Cleaning Service provides weekly cleaning services for $40 per week. In January, they collected payments from 50 customers for 3 months (12 weeks) of service each. For the month of January they will recognize ________ of revenue under the cash basis, and ________ under the accrual basis
A) $2,000, $600
B) $2,600, $0
C) $8,000, $2,400
D) $24,000, $8,000
Answer: D
Explanation: D) Using cash basis they recognize what is collected in January ($40 × 12 weeks × 50 customers). Using the accrual basis they recognize what was earned in January ($40 × 4 weeks × 50 customers).
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