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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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3 years ago
You can spend $10 for lunch and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the p
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Sally is buying a home and the closing date is set for april 20th. the annual property taxes are $1234.00 and have not been paid
Tems11 [23]

Sally is buying a home and the closing date is set for April 20th. the annual property taxes are $1234.00 and have not been paid yet. The answer is $368.51.

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Step 2: Seller will credit buyer from January through midnight the day before closing. Calculate the exact number of days; January 31 + February 28 + March 31 + April 19 = 109 days Step 3: Multiply the daily rate ($3.3808219178) x Number of days (109) = $368.51

Property tax is the sum that a landowner must pay to the local government or municipal body in their area. Every year, the tax is due and payable. Real estate assets include real estate, commercial real estate, and residential real estate that is rented to third parties.

Owners of real estate must pay property taxes that are computed by the municipal authority where the asset is situated.

Property tax is calculated based on the value of the property, which can be a tangible personal property or real estate in various countries.

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6 0
2 years ago
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When required reserves exceed actual reserves, commercial banks will be forced to have borrowers:?
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