During 20B, its second year in operation, Banner Company delivered goods to customers for which customers paid or promised to pay $5,850,000. The amount of cash collected from customers was $5,960,000. The amount of trade receivables at the beginning of 20B was $1,200,000.What is the amount of sales revenue that Banner should report on its statement of earnings for 20B?

Question

Quizplus · Accepted Answer

Sales revenue represents the total amount of revenue earned from the sale of goods or services. In this case, Banner Company delivered goods to customers for which they paid or promised to pay $5,850,000, which represents the total amount of sales revenue. The amount of cash collected from customers of $5,960,000 is irrelevant when calculating sales revenue. The beginning balance of trade receivables is also not required to calculate total sales revenue. Therefore, the correct answer is A) $5,850,000.

During 20B, Its Second Year in Operation, Banner Company Delivered