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Liono4ka [1.6K]
3 years ago
8

20. Otto's Tune-Up Shop follows the revenue recognition principle. Otto services a car on August 31. The customer picks up the v

ehicle on September 1 and mails the payment to Otto on September 5.Otto receives the check in the mail on September 6. When should Otto show that the revenue was recognized? A) August 31 B) August 1 C) September 5 mber
Business
2 answers:
ss7ja [257]3 years ago
5 0

Answer:

A) August 31

Explanation:

The revenue recognition principal states that a company should only recognize revenue when it has substantially completed the earning process. This earning process can be completed either before or after receiving the payment. If it is completed before receiving payment, an accounts receivable is created. But if the good or service was paid in advance, an accounts payable is created until the good or service is delivered or completed.

In this case, Otto completed the earning process either August 31 or September 1, it is not clear when the car service was completed, but since September 1 is not an option, then the only possible option is August 31.

Allushta [10]3 years ago
4 0

Answer:

Option A-The revenue must be recognized on 31 August.

Explanation:

The accrual concept says that the income must be recognized when they are earned not when the amount is received and expenses when they are incurred not when they are paid.

So according to accrual concept, the entity must deliver its share to recognize sales that is servicing the car. When the entity will service the car then it should recognize the revenue otherwise not. So in accrual basis accounting the date of payment is irrelevant for recognition of revenue and expenses.

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Mars2501 [29]

Answer:

Operations management is relevant to improve the overall productivity in an organization as it involves working with all departments in the organization.

Explanation:

Operations management involves <u>planning, organizing and controlling the production processes by which raw materials are converted into valuable goods and services to be distributed to customers.</u>

An operations manager works with managers in other organizational functions to <u>improve the overall productivity in the organization.</u>

He or she maintains contact with; the financial manager to agree on the budget needed for production, the purchasing manager to determine what raw materials will be purchased for production, the personnel manager to sort out the human resources required for the production process, and the marketing manager to ensure that customer needs are taken into consideration when producing goods and services.

4 0
2 years ago
Suppose the following information is available for Callaway Golf Company for the years 2022 and 2021. (Dollars are in thousands,
MrRissso [65]

Answer:

                                                                     2022         2021

EPS                                                                 $1.12         $0.99

Explanation:

EPS = NET INCOME / no of shares outstanding

       = $75801000/68000000 =1.12 (2022)

       = $68855000/ 69820000= 0.99 (2021)

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3 years ago
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The deductible is the amount of the insurance claim that must be paid by the insured, the rest is paid by the insurance company.

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