On January 1,2019,a customer places an order for a new customized vehicle.The contract price is $42,000.The vehicle is delivered to the dealer and customer on April 1,2019.What amount of revenue does the dealer record on January 1,2019 and April 1,2019?

Question

Quizplus · Accepted Answer

The revenue recognition principle states that revenue should be recognized when the seller has transferred control of the goods or services to the buyer. 
In this case, the vehicle was not delivered until April 1, 2019. Therefore, the dealer should not record any revenue in January 1, 2019. 
The entire contract price of $42,000 should be recorded as revenue on April 1, 2019, when the vehicle was delivered to the customer and the control of the goods was transferred to the buyer. So, the correct answer is D.

On January 1,2019,a Customer Places an Order for a New