State in which month the revenue will be recognized and calculate how much will be recognized in each month, and Explain why.

 

An accounting firm is engaged to audit a local charity's financial statements. The charity's fiscal year end is March 31. The audit is completed during the month of May, and on May 31 the firm invoices the charity for $4,500 based on its standard rates. The manager of the charity requests a discount on the fees and after some negotiations, the audit firm agrees to allow a 20% discount, and the invoice is paid in August.