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Worldatwork Exam c8 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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Joana
1 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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Eladia
3 days ago
The revenue is recorded when the order is shipped.
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Alyce
5 days ago
A) March 1st
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Elenor
1 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
15 days ago
Oh, I see. Thanks for the clarification!
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Benton
26 days ago
That's correct, revenue should be recognized when the product is shipped.
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Carin
1 months ago
You should record the revenue on March 1st.
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Kenia
2 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
19 days 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
1 months ago
User2: I agree with User1, revenue should be recognized when the product is shipped.
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Helga
1 months ago
User1: I think it should be March 1st, when the order was shipped.
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Alline
2 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
2 months ago
Exactly. It ensures that financial statements accurately reflect the company's performance during a specific period.
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Pansy
2 months ago
That makes sense. It's all about matching revenue with the period in which it was earned.
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Sharee
2 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
2 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
2 months ago
March 1st, of course! That's when the order was shipped and invoiced. Easy peasy.
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Wai
1 months ago
Exactly, the revenue should be recorded on March 1st since that's when the sale was made.
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Annett
2 months ago
March 1st
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Dottie
2 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
2 months ago
I agree with Leonora, because that's when the order was shipped.
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Leonora
3 months ago
I think the revenue should be recorded on March 1st.
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