Question

Linda delivers pizzas for a pizza shop. On Wednesday, December 31, 2015, Linda made several deliveries and collected 400 from customers. However, Linda forgot to turn in the proceeds for the day to her employer until the following Friday, January 2, 2016. The pizza shop owner recognizes the income of400 when he receives it from Linda in 2016. What is the total amount of income recognized by the pizza shop owner in 2016?

1) 400
2) 0
3) 800
4) Cannot be determined

Answer 1

The pizza shop owner recognizes income when it is received, so the $400 collected from Linda's deliveries is recognized in 2016. Option 1 is correct answer.

Step-by-step explanation:

The question at hand is concerning when the pizza shop owner should recognize the income they have received.

Linda, an employee, made deliveries on December 31, 2015, and collected $400 from customers but forgot to turn it in until January 2, 2016. The pizza shop owner uses the date they received the money from Linda to recognize the income, which would be in 2016.

Therefore, the total amount of income recognized by the pizza shop owner in 2016 from Linda’s deliveries would be $400.