|Posted: 21 May 2010 at 16:19 | IP Logged
This question is from Becker final exam 2 testlet 1-
A municipality with a December 31 year-end bills its occupational licenses to businesses in the town on December 15, 20X1. The license authorizes the business to operate during the year beginning January 1, 20X2. Discounts are available for payments made prior to December 31, 20X1, however payment is expected no later than January 31, 20X2. As a result of the billing, the municipality would:
A. Record a receivable and occupational license revenue for the year ended December 31, 20X1.
b. Record a receivable and deferred occupational license revenue at December 31, 20X1.
C, Record a receivable to the extent of estimated collections prior to December 31.
d. Give no recognition to accrued occupational license revenue.
The correct answer is D.
Can someone explain to me why the answer is D? I chose A.