A contract was signed with the hotel to provide food and beverage services for all breakfasts, lunches, and breaks and for dinners on three of the four nights. The total cost of these services was $13,000. A deposit of 20% is required in December (two months prior to the conference), with the remainder due in January.

1. When should the expense for the food and beverage services be recorded on your organizations income statement?

What is the effect on the financial statements (balance sheet and income statement) in November? In December? In January? In February