9) Nicholson Company had the following transactions during 2017: • Sales of $4,8
ID: 2332065 • Letter: 9
Question
9) Nicholson Company had the following transactions during 2017:
• Sales of $4,800 on account
• Received $2,000 cash for services to be performed in 2018
• Paid $1,625 cash in salaries
• Purchased airline tickets for $250 in December, 2017 for a trip to take place in 2018
What is Nicholson’s 2017 net income using accrual accounting?
a.
$2,925.
b.
$3,175.
c.
$4,925.
d.
$5,175.
10) Lane & Lenge Florists in West Hartford makes a large sale for $1,200 on November 30.
The shop’s chief accountant, Ashley Doris Wilson (Hall High 2007) sends an invoice that day. The customer receives the invoice on December 1. Lane & Lenge receives a check for $1,200 on December 10. The flower shop follows GAAP and applies the revenue recognition principle. When is the $1,200 considered to be recognized as revenue?
a. November 30. b. December 1.
c. December 10. d. December 31.
a.
$2,925.
b.
$3,175.
c.
$4,925.
d.
$5,175.
Explanation / Answer
9
10
a. November 30
Revenue is recognized when goods are transferred or services rendered
Sales 4800 Less Salaries Paid 1625 net income 3175Related Questions
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