$3,750 , 0 please mark the correct answer In the Month of March, Chester receive

ID: 2500565 • Letter: #

Question

$3,750 , 0

please mark the correct answer

In the Month of March, Chester received orders of 200 units at a price of $15.00 for their product Creak, and in April receives an order for 50 units of their product Creak at $15.00. Chester uses the accrual method of accounting and offers 30 day credit terms. Chester delivers 0 units in March, 200 units in April and 50 units in May. They received payment for 200 units in April, and payment for 50 units in May. How much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands) Select: 1 0, $3,000 $3,000 , $750 $1,250 , $1,250

$3,750 , 0

please mark the correct answer

Explanation / Answer

Ans (1)

March

April

Creak Dispatch

200

Unit Price

15.00

Revenue Recognized

$ 3,000.00

Under accrual basis of Accounting ,Revenue is Recognized when both of the conditions are met

Revenue is recognized

Revenue is realized or realizable

*Revenue is earned when product are delivered

*Realized means cash are received

*Realizable means it will ensure that cash will be received in future.