1. When will revenues and matching expenses be recognized? A.) The goods are shipped to customers...
1. When will revenues and matching expenses be recognized?
A.) The goods are shipped to customers increasing accounts receivable
B.) Raw materials or finished goods are purchased increasing accounts payable
C.) Goods are received into finishing goods inventory
D.) Suppliers are paid cash reducing accounts payable
E.) Customers pay cash reducing accounts receivable
Homework Answers
The Answer is:
A.) The goods are shipped to customers increasing accounts receivable
Explanation:
1) When goods are shipped to customers, revenue will be recognized along with that matching expense [i.e., cost of goods sold]. So, This option A is correct.
2) In option B&C, There is a expense for purchase or manufacturing but no revenue. So, There are incorrect.
3) In Option D&E, Either cash is paid to accounts payable or cash collected from receivables. So, There are incorrect.
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