Poundmaker Accounting Services began operations on January 1, 2014. Set up the following T-accounts, which show balances at January 31: Cash $890; Accounts Receivable $1,200; Prepaid Insurance $0; Computer Equipment $480; Accounts Payable $250; Notes Payable $0; Neil Poundmaker, Capital $800; Neil Poundmaker, Withdrawals $0; Service Revenue $2,600; Wages Expense $1,080. The activities below occurred during February. Identify the transactions and record them directly in the T-accounts. Use the dates beside the transactions to identify the entries. Also, determine the balance of each account.
Feb. 2 Neil Poundmaker provided services to a customer and collected cash of $3,100.
10 Purchased $7,600 of new computer equipment for the business by signing a note.
12 Performed $15,000 of accounting services for a client on account.
14 Paid the $4,000 annual insurance premium covering the next 12 months.
18 Billed a client $1,900 for work performed today.
20 Collected $2,400 from a credit customer.
21 Poundmaker ordered $1,600 in new accounting software from a local vendor; it will be paid for when it arrives in about two weeks.
22 Collected $10,000 from the customer of February 12.
23 Paid half of the outstanding accounts payable.
25 Poundmaker withdrew $1,000 cash for personal use.
26 Paid part-time employee wages of $1,600.
Analysis Component: Regarding February 12, which GAAP must be considered in determining the appropriate accounting treatment for this item?