Calmar Corporation sold merchandise to a customer for $30,000 on credit on July 15.The customer paid Calmar Corporation the amount due on July 31.Under the accrual basis of accounting,how should Calmar Corporation record the transaction?

Question

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Under the accrual basis of accounting, revenue is recognized when earned, not when cash is received. On July 15, Calmar Corporation would record the sale as an increase in accounts receivable (an asset) and an increase in revenue. When the customer pays on July 31, cash increases and accounts receivable decreases, with no net effect on total assets.

Calmar Corporation Sold Merchandise to a Customer for $30,000 on Credit