Answer:
$ 3,200
Explanation:
As per the accrual principle, income and expenses are recognized when they are incurred, regardless of whether payment has been made or received. For example, expenses are recognized when a product is bought, or service utilized even if payment has not been made.
For Lobos Inc., income for December will be
$ 900 of services to customers and payment expected next month
$ 2300 services performed and paid in December
The $1200 payment for next month is not an income for December. The services have not been performed; hence income cannot be recognized.
Total income will be $900 + $2300= $ 3,200
