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Angelina_Jolie
15 days ago
14

This month, a company receives $5,000 from a regular customer, of which $3,000 is for products delivered last month and $2,000 i

s for products that will be delivered next month. How much revenue should the company record for this month?
Business
1 answer:
Nady [2.9K]15 days ago
3 0
The company should recognize $2,000 as revenue.

The accrual principle in accounting mandates that revenue should align with expenses. Although the business received $5,000 in cash from the client, it only delivered $3,000 worth of products in the current month. Essentially, it incurred expenses only for the delivery of those $3,000 worth of items. Consequently, for the present month, the revenue recorded by the firm will be $3,000, with the balance of $2,000 recognized in the subsequent month.

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