Company E, a consulting firm, provides services worth $10,000 in December. The client pays for these services in January of the following year. Analyze the transaction in terms of the Accrual Concept, discussing its impact on the company's financial statements and financial performance.

The application of the Accrual Concept necessitates the recognition of revenue when it is earned, regardless of when cash is received. Therefore, the $10,000 revenue from the services provided in December should be recognized in December's income statement, contributing to the company's revenue and net income for that period, despite the actual cash inflow occurring in January.