To obtain a new customer, a business sells merchandise to the customer for $40.

Question

To obtain a new customer, a business sells merchandise to the customer for $40. Normally the merchandise sells for $80. For this sale, the business should record revenue of
A.) $80 B.) $40 C.) either account D.) an average of the two amounts To obtain a new customer, a business sells merchandise to the customer for $40. Normally the merchandise sells for $80. For this sale, the business should record revenue of
A.) $80 B.) $40 C.) either account D.) an average of the two amounts
A.) $80 B.) $40 C.) either account D.) an average of the two amounts

Explanation / Answer

B) $ 40

Normally merchandie sells for $ 80. To obtain a new custmer, merchandise has been sold at discount.Revenue is recognised to the extent it is actually earning by entity through business or services.In this case only $ 40 is the inflows in hand of company.So, only $ 40 has been recognised a revenue here.

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