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Worldatwork c8 Exam - Topic 1 Question 83 Discussion

Actual exam question for Worldatwork's c8 exam
Question #: 83
Topic #: 1
[All c8 Questions]

The Alpha company ships an order to a customer on March 1st and invoices the customer for the product with the shipment, with payment terms of net 30 days. The customer's payment is received on April 5th. The payment clears the bank and shows on Alpha's account on April 8th. If Alpha is using accrual accounting, when does it record the revenue for this sale?

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Suggested Answer: A

by Deonna at Sep 13, 2024, 03:05 AM

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Ozell
4 months ago
Yup, March 1st is the right answer!
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Charisse
4 months ago
I thought you had to wait for the cash to actually come in.
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Laurel
4 months ago
Wait, so they record it before the payment clears? That seems odd.
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Cristal
4 months ago
Totally agree, it's all about when the sale happens, not when payment is received.
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Elroy
4 months ago
Revenue is recorded on March 1st under accrual accounting.
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Twila
5 months ago
I thought it might be when the payment clears, but I guess that's not how accrual accounting works? So maybe March 1st?
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Malinda
5 months ago
I practiced a similar question, and I believe it was about recognizing revenue at the point of sale, so March 1st feels right.
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Aja
5 months ago
I'm a bit unsure, but I remember something about recognizing revenue when it's earned, which seems like it would be March 1st too.
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Tiffiny
5 months ago
I think the revenue should be recorded on March 1st since that's when the shipment and invoice happened.
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Dierdre
5 months ago
I'm pretty confident the answer is D. The revenue is recorded when the payment clears the bank on April 8th, not when it's received on April 5th.
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Quiana
5 months ago
Based on the accrual accounting concept, I believe the revenue should be recorded on March 31st, since that's the end of the 30-day payment period.
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Tiera
5 months ago
I'm a little confused on the difference between when the payment was received and when it cleared the bank. Does that matter for revenue recognition?
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Hester
5 months ago
Okay, I've got this. The key is that the revenue should be recorded when the customer's payment is received, which is April 5th.
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Remona
5 months ago
Hmm, this seems like a tricky one. I'll need to think through the accrual accounting principles carefully to determine the right answer.
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Joana
10 months ago
Wait, is this a trick question? What if the answer is 'all of the above' because it's a leap year or something?
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Charolette
9 months ago
C) April 5th
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Eladia
9 months ago
The revenue is recorded when the order is shipped.
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Alyce
9 months ago
A) March 1st
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Elenor
10 months ago
Hmm, I'm a bit stumped on this one. Maybe I should have paid more attention in my accounting class.
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Donette
9 months ago
Oh, I see. Thanks for the clarification!
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Benton
10 months ago
That's correct, revenue should be recognized when the product is shipped.
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Carin
10 months ago
You should record the revenue on March 1st.
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Kenia
11 months ago
I'm going with April 5th. That's when the customer's payment was received, so that's the revenue recognition date.
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Nicolette
9 months ago
User3: I'm going with April 5th. That's when the customer's payment was received, so that's the revenue recognition date.
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Gregoria
10 months ago
User2: I agree with User1, revenue should be recognized when the product is shipped.
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Helga
10 months ago
User1: I think it should be March 1st, when the order was shipped.
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Alline
11 months ago
April 8th, for sure. That's when the payment actually showed up in Alpha's account, which is the key date for accrual accounting.
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Jani
10 months ago
Exactly. It ensures that financial statements accurately reflect the company's performance during a specific period.
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Pansy
10 months ago
That makes sense. It's all about matching revenue with the period in which it was earned.
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Sharee
10 months ago
So, the revenue for this sale would be recorded on April 8th when the payment cleared the bank.
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Chau
11 months ago
Yes, you're right. Accrual accounting records revenue when it is earned, regardless of when payment is received.
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Vallie
11 months ago
March 1st, of course! That's when the order was shipped and invoiced. Easy peasy.
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Wai
10 months ago
Exactly, the revenue should be recorded on March 1st since that's when the sale was made.
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Annett
10 months ago
March 1st
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Dottie
11 months ago
But shouldn't revenue be recognized when payment is received? So, it should be recorded on April 5th.
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Cassandra
11 months ago
I agree with Leonora, because that's when the order was shipped.
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Leonora
11 months ago
I think the revenue should be recorded on March 1st.
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