Question
On June 30, Big Cleaning Ltd. performed a cleaning service for a customer on account. Several employees needed to work overtime to finish the job
On June 30, Big Cleaning Ltd. performed a cleaning service for a customer on account. Several employees needed to work overtime to finish the job on that date.
The company received cash from this customer on July 5 and it distributed the pay cheques to its employees on July 7.
The overtime wages should be recorded as an expense:
A) on June 30, under the cash basis accounting. B) on June 30, under the accrual basis accounting. C) on July 5, under the accrual basis accounting. D) on July 5, under the cash basis accounting.
Please provide a short explanation as well.
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