Assume that a business collects two-thirds of its sales revenue in the month of sale and the remaining one-third in the following month.

Required:

a How much revenue has the business actually earned in the month of the sale?

b Should the business record revenue on the income statement in the month when it collects the cash or when the work was done to earn the revenue?

c What are your reasons for choosing one alternative over the other? (What are your reasons for not choosing the other alternative?)