The Ming Company sells $1,000 worth of goods on July 25 on credit. The customer sends the company a cheque on August 15. The customer receives the goods on September 1. Assuming the company uses accrual accounting, the sale will be recorded in ______.
A) August
B) July
C) September
D) either July, August, or September

Question

Quizplus · Accepted Answer

In accrual accounting, revenue is recognized when it is earned, not when payment is received. Since the goods were sold on July 25, the sale is recorded in July.

The Ming Company Sells $1,000 Worth of Goods on July