Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. In completing the engagement, Zupan pays no costs in March, $2,000 in April, and $2,500 in May (incurred in April). How much expense should the firm deduct from revenues in the month when it recognizes the revenue?

Question

Business

Kason Baxter

10 June, 20:51

Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. In completing the engagement, Zupan pays no costs in March, $2,000 in April, and $2,500 in May (incurred in April). How much expense should the firm deduct from revenues in the month when it recognizes the revenue?

+5

Answers (1)

Know the Answer?

Haylie Norris · Answer 1

Expenses of $4,500 should be deducted from the revenues in April. Under the expense recognition principle efforts (expenses) should be matched with accomplishments (revenues).