Question
Bradley Employment Service helps clients find employment. The firm uses accrual accounting and issues monthly financial statements. On January 1, 2018, Steven Sorenson pays an
Bradley Employment Service helps clients find employment. The firm uses accrual accounting and issues monthly financial statements. On January 1, 2018, Steven Sorenson pays an initial, nonrefundable fee of $500 to the firm. Bradley also charges $250 for six months of employment services. Even if Steven receives a job offer, Steven can continue to use Bradley's services for six months after paying the nonrefundable fee of $500. Steven accepts a job offer on February 15. a.What amount of revenue should Bradley Employment Service record on January 1, 2018, if any? Explain using principles of accrual accounting. b.What amount of revenue should Bradley Employment Service record on February 15, if any? Explain using principles of accrual accounting. c.Should Bradley Employment Service record any revenue on July 1, 2018? Why or why not? Explain using principles of accrual accounting.
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