A firm uses the instalment method of revenue recognition on an item with a cash selling price of $1,000 and cost of $600. During the year of sale, the firm received $250 from the customer. Thereafter, no more cash is received. The firm repossesses the item, worth $500 at that time. The entry to record the repossession includes:
A) Loss $350
B) Loss $250
C) Gain $200
D) Gain $50

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The Answer of A firm uses the instalment method of revenue recognition on an item with a cash selling price of $1,000 and cost of $600. During the year of sale, the firm received $250 from the customer. Thereafter, no more cash is received. The firm repossesses the item, worth $500 at that time. The entry to record the repossession includes:
A) Loss $350
B) Loss $250
C) Gain $200
D) Gain $50

A Firm Uses the Instalment Method of Revenue Recognition on an Item