Complete Electronics Inc

question 41

Multiple Choice

Complete Electronics Inc.sells a point-of-sale computer with a two-year service contract.Complete collects $3,000 cash for the selling price of the computer and $576 for the two-year service contract.How is revenue recognized?

• A)Complete will record Sales Revenue of $3,576 when the computer is delivered to the customer.
• B)Complete will record Sales Revenue of $1,788 per year for two years.
• C)Complete will record Sales Revenue of $3,000 when the computer is delivered and Service Revenue of $24 per month for 24 months.
• D)Complete will record Sales Revenue of $3,000 when the computer is delivered and will record revenue for the service contract as service calls are made.

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Definitions:

Cash Flows

The total movement of cash and assets akin to cash entering and leaving a business enterprise.

Discount Rate

The interest rate that central banks charge commercial banks for loans, influencing monetary policy and economic conditions.

Monthly Payments

Regular payments made over a period, often used in loans and mortgages, covering interest and principal repayment.

College Support

Financial assistance provided to students for education expenses, which may include scholarships, grants, and loans.