Question 5 fo The Rainbow House Painting Company has been co

Question 5 fo The Rainbow House Painting Company has been contracted to paint a house for $3,600 One-hait of that mount wui be peid up front, the rest ll be peid upon sfchory complesion Ribow should ecognize the evee w O the work begins O the frst payment is recenved O hait of the work is complete and haitl of the peyments have been receved the work is complese

Solution

1. last option is correct. Revenue should be recodnized when work is complete.

2. Last option is correct. Accrual accounting is a better measure of performance as it includes all period costs incurred whether it is paid or not.

3. Last option is correct. Unearned revenue is advance received from customer for services to be performed.