In the Month of March, Digby received orders of 170 units at a price of $15.00 for their product Dart, and in April receives an order for 43 units of their product Dart at $15.00. Digby uses the accrual method of accounting and offers 30 day credit terms. Digby delivers 0 units in March, 170 units in April and 43 units in May. They received payment for 170 units in April, and payment for 43 units in May. 1. How much revenue is recognized on the March income statement from this order? 2. How much in the April Income statement? (Answer in thousands) a. 0, $2,550 b. $2,550, $638 c. $1,062, $1,062 d. $3,188, 0

Question

Business

Angel Lam

31 March, 06:49

In the Month of March, Digby received orders of 170 units at a price of $15.00 for their product Dart, and in April receives an order for 43 units of their product Dart at $15.00. Digby uses the accrual method of accounting and offers 30 day credit terms. Digby delivers 0 units in March, 170 units in April and 43 units in May. They received payment for 170 units in April, and payment for 43 units in May. 1. How much revenue is recognized on the March income statement from this order? 2. How much in the April Income statement? (Answer in thousands) a. 0, $2,550 b. $2,550, $638 c. $1,062, $1,062 d. $3,188, 0

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Answers (1)

Know the Answer?

Mylee Padilla · Answer 1

The answer is option A

Explanation:

Accrual Method of accounting revenue is when transactions are recorded as they exist in account books, even when the payment was not obtained or made for that particular product or service.

Due to this, the answer is option A because 0 units was delivered in March.