What Is the Threshold for Reporting a Major Customer

question 17

Multiple Choice

What is the threshold for reporting a major customer?

• A)5 percent of revenues
• B)5 percent of profits
• C)10 percent of revenues
• D)10 percent of profits

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Definitions:

Accounts Receivable

Funds that customers owe to a company for products or services that have been provided but not yet compensated for.

Wages Expense

An accounting term for the total cost incurred by a company to compensate its employees, shown on the income statement.

Service Revenue

Income earned by a company for the services it provides to its customers.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as shareholders' equity.