Slater Company uses the cash basis of accounting. Slater Company collected $950,000 from its customers during 2015. Customers owed Slater $150,000 of accounts receivable at the beginning of 2015, and $190,000 of accounts receivable at the end of 2015. What is Slater's sales revenue for 2015 under the accrual basis of accounting?

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Under the accrual basis of accounting, sales revenue is recognized when earned, not necessarily when cash is received. To calculate sales revenue for 2015, start with cash collected from customers ($950,000), add the increase in accounts receivable from the beginning to the end of the year ($190,000 - $150,000 = $40,000). Therefore, sales revenue for 2015 is $950,000 + $40,000 = $990,000.

Slater Company Uses the Cash Basis of Accounting