In a service-type business, revenue is considered earned when the service is performed. This means that once the service has been provided to the customer, the revenue associated with that service can be recognized.
For example, let's say a consulting firm offers its services to a client in January. The consultants provide the service during that month, even though the client may pay for the service at a later date. In this case, the revenue would be considered earned in January when the service was performed, regardless of when the payment is actually received.
Therefore, option B) when the service is performed, is the correct answer.
