You Bought a Sanding Machine from the Local Hardware Store

question 15

Multiple Choice

You bought a sanding machine from the local hardware store using the credit card of the store chain on December 30, 2019 to be delivered on January 10, 2020.When should the sanding machine be recognized on the firm's balance sheet?

• A)When the payment is made to the credit card
• B)When you receive the machine on Jan.10
• C)When you made the purchase on Dec.30
• D)When the credit card company makes the payment to the store

---

Definitions:

Revenue Recognition

Revenue recognition is an accounting principle that outlines the specific conditions under which revenue is recognized and dictates how to account for it.

Distributions

Payments made by a fund, trust, or company to its shareholders or partners, often from profits or interest earned.

Owners

Individuals or entities that hold a property right or equity interest in a business.