Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 2, Problem 5MCQ
To determine
State the circumstance in which the sales revenue is recognized.
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Under the realization principle, revenue from sale of products is recognized
a. At date of delivery to the customers C. When the customers are billed
b. When the inventories are readied for shipment D. Upon receipt of cash payment
When should revenue from the sale of merchandise normally be recognized?
A)When the customer takes possession of the merchandise.
B)When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit.
C)Either on the date the customer takes possession of the merchandise or on the date on which the customer pays.
D)When the customer pays for the merchandise.
When should revenue from the sale of merchandise normally be recognized? (Assume the company reports using ASPE.)
a.When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit.
b.When the customer pays for the merchandise.
c.Either on the date the customer takes possession of the merchandise or on the date on which the customer pays.
d.When the customer takes possession of the merchandise.
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1YTCh. 2 - Prob. 2YTCh. 2 - Is prepaid insurance an expense or an asset?...Ch. 2 - Prob. 4YTCh. 2 - Give an example of the matching principle from the...Ch. 2 - What is the difference between cash basis and...Ch. 2 - Prob. 7YTCh. 2 - What is GAAP? What is IFRS?Ch. 2 - Prob. 2QCh. 2 - Prob. 3Q
Ch. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - What are the four basic financial statements?Ch. 2 - Which financial statement pertains to a single...Ch. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - What does recognize revenue mean in accounting?Ch. 2 - Prob. 14QCh. 2 - What is an accrual? What is a deferral?Ch. 2 - Must a company collect the money from a sale...Ch. 2 - What is the cost of goods sold?Ch. 2 - Explain the difference between cash basis...Ch. 2 - Prob. 19QCh. 2 - Prob. 20QCh. 2 - Prob. 21QCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Prob. 7MCQCh. 2 - Prob. 8MCQCh. 2 - Prob. 9MCQCh. 2 - Prob. 10MCQCh. 2 - Elements of the financial statements. (LO 3). For...Ch. 2 - Prob. 2SEACh. 2 - Prob. 3SEACh. 2 - Prob. 4SEACh. 2 - Prob. 5SEACh. 2 - Prob. 6SEACh. 2 - Cash versus credit sales. (LO 3, 4). Company A had...Ch. 2 - Prob. 8SEACh. 2 - Prob. 9SEACh. 2 - Prob. 10SEACh. 2 - Prob. 11SEBCh. 2 - Prob. 12SEBCh. 2 - Prob. 13SEBCh. 2 - Prob. 14SEBCh. 2 - Prob. 15SEBCh. 2 - Prob. 16SEBCh. 2 - Prob. 17SEBCh. 2 - Prob. 18SEBCh. 2 - Prob. 19SEBCh. 2 - Prob. 20SEBCh. 2 - Prob. 21EACh. 2 - Prob. 22EACh. 2 - Prob. 23EACh. 2 - Balance sheet and income statement transactions....Ch. 2 - Prob. 25EACh. 2 - Prob. 26EACh. 2 - Prob. 27EACh. 2 - Prob. 28EACh. 2 - Elements of the financial statements. (LO 3). The...Ch. 2 - Prob. 30EBCh. 2 - Elements of the financial statements. (LO 3)....Ch. 2 - Prob. 32EBCh. 2 - Prob. 33EBCh. 2 - Prob. 34EBCh. 2 - Prob. 35EBCh. 2 - Current ratio. (LO 5). The following data was...Ch. 2 - Prob. 37PACh. 2 - Prob. 38PACh. 2 - Prob. 39PACh. 2 - Prob. 40PACh. 2 - Prob. 41PACh. 2 - Prob. 42PBCh. 2 - Prob. 43PBCh. 2 - Prob. 44PBCh. 2 - Prob. 45PBCh. 2 - Prob. 46PBCh. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSA
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- If a customer pays with a credit card and the service has been provided, which of the following accounts will be used to record the sales entry for this transaction? A. Cost of Goods Sold, Merchandise Inventory, Sales Revenue B. Sales Revenue, Credit Card Expense, Accounts Receivable C. Accounts Receivable, Merchandise Inventory, Credit Card Expense D. Cost of Goods Sold, Credit Card Expense, Sales Revenuearrow_forwardAt what point does revenue recognition occur? A. When the purchase order is received B. When the seller receives the money for the job C. When the seller has met performance D. When the purchaser makes paymentarrow_forwardWhich of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods soldarrow_forward
- If a customer purchases merchandise on credit and returns the defective merchandise before payment, what accounts would recognize this transaction? A. sales discount, cash B. sales returns and allowances, cash C. accounts receivable, sales discount D. accounts receivable, sales returns and allowancesarrow_forwardWhich two accounts are used to recognize shipping charges for a buyer, assuming the buyer purchases with cash and the terms are FOB Shipping Point? A. delivery expense, cash B. merchandise inventory, cash C. merchandise inventory, accounts payable D. The buyer does not record anything for shipping since it is FOB Shipping Point.arrow_forward1. Sales revenue should be recognized when: a. sales are invoiced. b. payment is received from the customer. c. the customer's order is received. d. goods are shipped.arrow_forward
- If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing aarrow_forwardIf merchandise purchased on account is returned, the buyer may inform the seller of the details by issuing a(n)arrow_forwardIdentify if the two statements are either true or false. 1. The bill of lading is a document prepared by the seller detailing the terms of delivery 2. The sales invoice is the evidence for credit sales and purchases.arrow_forward
- Terminology Match each phrase with its definition. A. Sales discount B. Credit period C. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchases discount 1. 2. 3. 4. 5. 6. 7. 8. Goods a company owns and expects to see to its customers. Time period that can pass before a customer's full payment is due. Seller's description of a cash discount granted to buyers in return for early payment. Ownership of goods is transferred when the seller delivers goods to the carrier. Purchaser's description of a cash discount received from a supplier of goods. Difference between net sales and the cost of goods sold. Time period in which a cash discount is available. Ownership of goods is transferred when delivered to the buyer's place of business. 1arrow_forwardEnter the letter for each term in the blank space beside the definition that it most closely matches. A. Sales discount D. FOB destination G. Merchandise inventory B. Credit period E. FOB shipping point H. Purchases discount C. Discount period F. Gross profit 1. Goods a company owns and expects to sell to its customers. 2. Time period that can pass before a customer’s full payment is due. 3. Seller’s description of a cash discount granted to buyers in return for early payment. 4. Ownership of goods is transferred when the seller delivers goods to the carrier. 5. Purchaser’s description of a cash discount received from a supplier of goods. 6. Difference between net sales and the cost of goods sold. 7. Time period in which a cash discount is available. 8. Ownership of goods is transferred when delivered to the buyer’s place of business.arrow_forwardSales revenues are usually considered earned when Select one: a. goods have been transferred from the seller to the buyer. b. adjusting entries are made. C. an order is received. d. cash is received from credit sales.arrow_forward
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