Alex is a calendar year sole proprietor. He began business on December 1, this year. He uses the accrual method of accounting, following the revenue recognition principle accepted by GAAP. Alex had the following collections in December.

I. Collected $7,000 in December, from clients who paid cash for services to be performed next year.

II. Collected $5,000 in December, for services performed during December; deposited in an operating account on December 31, this year.

III. Collected $12,000 in December; on accounts receivable for services performed in December; deposited in operating account on January 2, next year.

What is the amount Alex must include in his income for December?

Answer rating: 100% (QA)

accrual basis of accounting method under which revenues are recogni... View the full answer