Question

The Canon Corporation sells ten copiers to the Title Company on October 15 for $40,000. Canon delivers the copiers to Title on October 20 and Title pays $16,000, agreeing to pay the balance on November 10. Using the accrual basis, which one of the following entries would properly record Canon's revenue recognition for October? A. DR Cash 40,000 CR Copier sales 40,000 B. DR Cash 16,000 CR Copier sales 16,000 C. DR Cash 16,000 DR Accounts receivable 24,000 D. CR Copier sales 40,000 DR Accounts receivable 40,000 CR Copier sales 40,000

Answer 1

The correct entry to properly record Canon's revenue recognition for October using the accrual basis is:

D. CR Copier sales 40,000
DR Accounts receivable 40,000

This entry reflects the sale of the copiers to Title Company for $40,000, recognizing both the revenue and the accounts receivable, as Title Company has agreed to pay the remaining balance on November 10.