Android Electronics Received an Order for 50 Digital Radios on 1

question 111

Multiple Choice

Android Electronics received an order for 50 digital radios on 1 June. The customer took delivery of the radios on 15 June. Android Electronics received payment from the customer on 20 June. The customer returned the goods as being unsuitable on 2 August. According to the profit recognition principle, on which date would the income be recorded?

• A)20 June
• B)The income would not be recorded at all.
• C)15 June
• D)1 June

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profit or loss over a specific period of time.

Financial Position

A snapshot of a company's financial health, encompassing assets, liabilities, and equity at a given point in time.

Specific Date

A particular day specified for a certain event, transaction, or deadline.

Return On Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring efficiency in generating earnings.