Question

In the Month of March, Digby received orders of 123 units at a price of $15.00 for their product Deal. Digby uses the accrual method of accounting and offers 30 day credit terms. Digby delivers 123 units in April. They received payment for 62 units in March, and 62 units in April. In the March income statement, how much revenue is recognized on the March income statement from this order

Answer 1

The amount of revenue is recognized on the March income statement from this order is $1,845.00.

Step-by-step explanation:

Accrual accounting can be described as a method of accounting in which revenue or expenses are recorded at the time of the transaction rather than when payment is received or made.

Since this transaction occurred in March, the total revenue of orders of 123 units received in the month of March will be recognized on the March income statement from this order. That is:

Amount of revenue to recognized in March = 123 * $15.00 = $1,845.00

Therefore, the amount of revenue is recognized on the March income statement from this order is $1,845.00.