Sales generated using credit terms are: Select one: a. Treated as deferred revenue until the customer...
Sales generated using credit terms are:
Select one:
a. Treated as deferred revenue until the customer makes a payment
b. Treated as revenue on the income statement
c. Treated as prepaid revenue after goods are delivered, or services provided
d. Not recorded
Homework Answers
Correct answer----------b. Treated as revenue on the income statement.
.
Sales is treated as revenue as soon as goods are transferred from seller to the buyer.
Collection of cash from customer does not affect revenue account. Collection could be done at any late but revenue is recorded when sales is made not when cash is collected. This is done in accordance with accrual basis of accounting system.
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Sales generated using credit terms are:
Select one:
a. Treated as deferred revenue until the customer...
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