Answer:
$686,000
Explanation:
net service revenue = gross revenue - discount for early payment
gross revenue = total sales price - trade discount
gross revenue = $800,000 - $100,000 = $700,000
net service revenue = $700,000 - 2%($700,000) = $700,000 - $14,000 = $686,000
Answer:
a. $6,400.
Explanation:
In solving this question on Computing the amount of Purchasing department expense to be allocated to Assembly, we'll have to use the formula below:
Purchasing department expense to be allocated to Fabrication = Total Cost of purchasing department X number of purchase order in / Total numbers of purchase orders in all operating departments
= $32000 X 4/20 = $6,400
Answer:
a) the liability recorded when cash was received is decreased by the adjustment for the revenue being earned
Explanation:
When cash is received for revenue yet to be earned, it is called deferred revenue. The entries posted at this point is a Debit to Cash (an increase in cash balance) and a Credit to Deferred revenue (a liability account). When the revenue gets earned, it get recognized with a Debit to Deferred revenue (to reduce the liability as the obligation has been fulfilled resulting in revenue being earned) and a Credit to Revenue (P/L).
Hence, the right option is a) the liability recorded when cash was received is decreased by the adjustment for the revenue being earned.
