Accounting engagement for acme company

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CPA Smith completed an accounting engagement for the ACME Company on December 20, 20X1, and sent ACME a bill for $5,000 which ACME paid on January 25, 20X2. CPA Smith uses the cash basis of accounting, and ACME uses the accrual basis of accounting. Both use a calendar year for their fiscal year.

1. CPA Smith should report the revenue in 20X2

2. CPA Smith should report the revenue in 20X1

3. Acme should report the expense in 20X2

4. None of the above

Reference no: EM1355358

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