FedZ Is a Local Package Delivery Service

question 34

Multiple Choice

FedZ is a local package delivery service. If FedZ uses accrual basis of accounting, when should it recognize revenue from its package delivery service?

• A) At the date the customer places the order
• B) At the date the packages are delivered
• C) At the date the invoice is mailed to the customer
• D) At the date the customer's payment is received

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Definitions:

Enforceable Contract

A valid contract that is legally recognized and that can be upheld in a court of law.

Sales Contract

A legal agreement between two parties for the exchange of goods, services, or property for payment.

Buyer Payment

The act of providing money or consideration by a buyer to a seller in exchange for goods, services, or property.

Depositary Bank

A financial institution that holds assets or securities in custody for its clients, facilitating trading and safekeeping of these assets.