On January 1,2015,a Customer Places an Order for a New

question 89

Multiple Choice

On January 1,2015,a customer places an order for a new vehicle built especially for the customer.The contract price is $22,000.The vehicle is delivered to the dealer and customer on April 1,2015.What amount of revenue does the dealer record on January 1,2015 and April 1,2015?

• A)$22,000; $0
• B)$11,000; $11,000
• C)$7,333; $7,333
• D)$0; $22,000

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Definitions:

Forward Contract

A non-standardized agreement between two parties to buy or sell an asset at a specified future time at a price agreed upon today.

Spot Rates

The current cost at which one can buy or sell a certain currency, ready for instant delivery.

Merchandise

Items or products that a company buys to sell to its customers in the course of its business.

Journal Entries

The foundational records in accounting that detail all financial transactions, using debits and credits to maintain balance.