A company sold $10 million of electronics equipment during 2012.They estimate that the warranty costs are normally 1.5% of sales and the company normally has difficulty in collecting 2% of its sales.What amount should they record as revenue in 2012?

Question

Quizplus · Accepted Answer

Revenue should be recorded at the full sales amount of $10 million, as warranty costs and collection difficulties are accounted for separately in expenses and allowances, not deducted from revenue.

A Company Sold $10 Million of Electronics Equipment During 2012