Dove Corporation Began Its Operations on September 1 of the Current

question 120

Multiple Choice

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 30% in the month following the sale. The cash collections in October are:

• A) $320,000
• B) $248,000
• C) $304,250
• D) $382,500

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Definitions:

Financial Accounting Standards

Rules and standards set by authoritative bodies that dictate how companies prepare and present their financial statements.

AICPA

Stands for American Institute of Certified Public Accountants, a professional organization for Certified Public Accountants (CPAs) in the United States.

SEC

The U.S. Securities and Exchange Commission, the federal agency responsible for enforcing federal securities laws and regulating the securities industry.

FASB

stands for the Financial Accounting Standards Board, which is responsible for establishing accounting and financial reporting standards in the United States.