During Its First Year of Operations,Widgets Incorporated Reported Sales Revenue

question 107

Multiple Choice

During its first year of operations,Widgets Incorporated reported Sales Revenue of $386,000 but collected only $303,000 from customers.At the end of the year,Accounts Receivable equal:

• A) $689,000.
• B) $386,000.
• C) $303,000.
• D) $83,000.

---

Definitions:

Accrual

A bookkeeping approach that logs income and expenditures at the time they occur, irrespective of the timing of actual cash transactions.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, presenting the financial results and health of the entity.

Onerous Contract

A contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

AASB 137

The Australian Accounting Standards Board standard that deals with the treatment of provisions, contingent liabilities, and contingent assets.