Larry uses an accrual method of accounting and a calendar ye

Larry uses an accrual method of accounting and a calendar year. On December 30, 2016, he completed work for a client and submitted his bill. The client had no dispute with the work done or the amount of the bill. The client paid Larry\'s bill in 2017. In which year should he report the income from this project? A.) He should report the income in 2017 B.) He may choose to report the income in either 2016 or 2017 C.) He should repor the income in 2016 D.) He should report half of the income in 2016 and half in 2017

Solution

The income should be reported in 2016. Under Accrual method income is reported when it is earned. Option C is correct