Question

A customer purchased a drill press on November 14 on account from Sears. The drill press was delivered two weeks later. The customer paid for the drill press on December 5. When should Sears record the revenue for this transaction according to the revenue recognition principle? Novemeber decemeber August march

Answer 1

November

Step-by-step explanation:

The principle of revenue recognition applies when the income is realized or earned whether cash is collected or not and it also meets the accounting accrual basis. Realizable herein means that the client gets the product but the payment is made afterward.

In the given case, the customer purchase a drill press from Sears so the same month i.e on November, it is to be reported according to the revenue recognition