Given below is the activity of Super Company: 1. Owners invested $20,000 in cash in the business
2) Credit sales were $80,000
3) Cash sales were $10,000
4) Cash collections from credit customers were $36,000
5) Cash borrowed on a note payable was $27,000
The total revenue for Super Company, using the accrual basis of accounting, is:
A) $46,000
B) $173,000
C) $126,000
D) $90,000

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenue is recognized when earned, not when cash is received. Therefore, total revenue includes both credit and cash sales: $80,000 (credit sales) + $10,000 (cash sales) = $90,000.

Given Below Is the Activity of Super Company: 1