All categories

3 years ago

If a company is using the accrual basis accounting method, when should it record its earned revenue?

Business

1 answer:

BigorU [14]3 years ago

4 0

Answer: b

Under the accrual basis of accounting, expenses are matched with the revenues related to it and/or are reported when the expense occurs, and not just when the cash is paid. The company should record its earned revenue when services are rendered. Payment may come at a later date.

You might be interested in

When reviewing your client's search network campaign, you notice that the ads in one of the ad groups have a low average positio

VashaNatasha [74]

Using the Target Search Page location strategy, a type of flexible bid strategy, will help systematize the bidding across several campaigns, ad groups, and keywords to show the ad on the top of the page or first page of google search results.

4 0

3 years ago

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance

Nitella [24]

Answer:

1. $1,930,000

2. Margin = 15%

Turnover = $2.8

Return on investment = 42%

3. $521,100

Explanation:

1. The computation of average operating assets for last year is shown below:-

Average operating assets = (Beginning operating assets + Ending operating assets) ÷ 2

= ($2,562,000 - $399,000 - $253,000) + ($2,634,000 - $434,000 - $250,000) ÷ 2

= ($1,910,000 + $1,950,000) ÷ 2

= $3,860,000 ÷ 2

= $1,930,000

2. The computation of company's margin, turnover, and return on investment is shown below:-

Margin = Net operating income ÷ Sales

= $810,600 ÷ $5,404,000

= 15%

Turnover = Sales ÷ Average operating assets

= $5,404,000 ÷ $1,930,000

= $2.8

Return on investment = Margin × Turnover

= 15% × $2.8

= 42%

3. The computation of residual income last year is shown below:-

Residual income last year = Net operating income - Minimum required return

= $810,600 - ($1,930,000 × 15%)

= $810,600 - $289,500

= $521,100

So, we have applied the above formula.

7 0

3 years ago

A double-entry accounting system is an accounting system: Multiple Choice That records each transaction twice. That records the

ddd [48]

Answer:

That records the effect of each transaction in at least two accounts with equal debits and credits.

Explanation:

A double-entry accounting system is the accounting system in which it shows the impact of each transaction in terms of debit and credit. In this the amount of credit should be equivalent to the amount of credit that means both the amount should be equivalent to each other

hence, the second option is correct and the same is to be considered

3 0

3 years ago

Webster Corporation's budgeted sales for February are $335,000. Webster pays sales representatives a commission of 7% of sales d

aivan3 [116]

Answer:

The correct answer is $31,850

Explanation:

Webster pays sales representatives a commission of 7% of sales dollars

( sales for February are $335,000)

$335,000 x 7% = $23,450 Comision to sales representatives

Total budgeted selling expenses for February.

$23,450 (comision)

$5,400 (sales manager salary)

$3,000 (advertising expense)

$23,450 + $5,400 + $3,000 = $31,850 Total budgeted selling expenses for February.

6 0

4 years ago

Olivia recently opened a salon. she strategically priced her salon's services slightly lower than that of other popular salons i

just olya [345]

Answer:

a) comparative advertising

Explanation:

The given scenario exemplifies Comparative Advertising. It is a marketing strategy in which a product or service of a particular company is presented as superior when compared to a competitor's in terms of price, quality, etc. It may involve printing a side-by-side comparison of the features of a company's products next to those of its competitor as here Olivia listed the prices of various services that she offered as well as the prices charged by two other salons in the area for the same services.

3 0

4 years ago