Complete Electronics Inc. sells a point-of-sale computer with a two-year service contract. Complete collects $3,000 cash for the selling price of the computer and $576 for the two-year service contract. How is revenue recognized?
A) Complete will record Sales Revenue of $3,576 when the computer is delivered to the customer.
B) Complete will record Sales Revenue of $1,788 per year for two years.
C) Complete will record Sales Revenue of $3,000 when the computer is delivered and Service Revenue of $24 per month for 24 months.
D) Complete will record Sales Revenue of $3,000 when the computer is delivered and will record revenue for the service contract as service calls are made.
C) Complete will record Sales Revenue of $3,000 when the computer is delivered and Service Revenue of $24 per month for 24 months.
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Scranton Company expects to begin operating on July 1, Year 1. The company's master budget contained the following operating expense budget: JanuaryFebruaryMarchSalary expenses$36,000 $36,000 $36,000 Sales commissions, 5% of sales 30,000 32,000 24,000 Utilities 2,800 2,800 2,800 Depreciation on store equipment 1,000 1,000 1,000 Rent 7,200 7,200 7,200 Miscellaneous 1,800 1,800 1,800 Total operating expenses$78,800 $80,800 $72,800 Sales commissions are paid in cash in the month following the month in which the expense is recognized. All other expense items requiring cash payment are paid in the month in which they are recognized. The amount of commissions payable that would appear on the company's pro forma balance sheet as of September 30,
Year 1 is: A. $30,000. B. $36,000. C. $24,000. D. $32,000.
A nonprofit organization landscaped the grounds of a building it occupies. This beautification improved the property values of the residences located across the street. This is an example of a(an) _____ externality.
A. nominal B. positive C. augmented D. complement
Which of the following is NOT consistent with lean practices?
a. reduced waiting b. reducing transportation c. minimizing overproduction d. excess motion
Unlike advertising, which can be conducted on a global basis, sales promotion
A. is restricted to developed countries. B. is unaffected by the rise of global brands. C. must adopt consolidation. D. must be adapted to local markets. E. must refrain from including sales contests in global markets.