Question - Suppose you work summers house-sitting for people while they are away on vacation. Most of your customers pay you immediately after you finish a job. A few ask you to send them a bill. It is now June 30 and you have collected $600 from cash paying customers. Your remaining customers owe you $1,400.
Requirements
1. How much service revenue would you have under the
a. cash basis?
b. accrual basis?
2. Which method of accounting provides more information about your house sitting business?