This month, a company receives $6,000 from a regular customer, of which $4,000 is for products delivered last month and $2,000 is for products that will be delivered next month. How much revenue should the company record for this month?
This month, a company receives $6,000 from a regular customer, of which $4,000 is for products delivered last month and $2,000 is for products that will be delivered next month. How much revenue should the company record for this month?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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This month, a company receives $6,000 from a regular customer, of which $4,000 is for products delivered last month and $2,000 is for products that will be delivered next month. How much revenue should the company record for this month?
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Step 1
Under the accrual basis of accounting, the revenue recognition principle of accounting states that the revenue should be recorded once the service or related goods have been provided/ delivered.
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