Question

Which of the following statements about credit sales are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• Revenue is reported when the company is paid by the customer.unchecked
• Accounts receivable arise from credit sales.unchecked
• Accounts receivable should be reported at net realizable value.checked
• Revenue is reported when the company fulfills its promise to transfer control of a good or service to a customer.unchecked
• The cost of a bad debt should be recorded in the accounting period in which a business realizes that a customer will not pay the amount owed.

Answer 1

The correct statements about credit sales are:

Accounts receivable arise from credit sales

Accounts receivable should be reported at net realizable value.

Revenue is reported when the company fulfills its promise to transfer control of a good or service to a customer