A Firm Uses the Instalment Method of Revenue Recognition on an Item

question 56

Multiple Choice

A firm uses the instalment method of revenue recognition on an item with a cash selling price of $1,000 and cost of $600. During the year of sale, the firm received $250 from the customer. Thereafter, no more cash is received. The firm repossesses the item, worth $500 at that time. The entry to record the repossession includes:

• A) Loss $350
• B) Loss $250
• C) Gain $200
• D) Gain $50

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Definitions:

Ethnic Conspiracy

A belief or theory that a particular ethnic group is secretly working to achieve malignant goals.

Organized Crime

Structured groups engaged in criminal activities, often for profit, such as drug trafficking, extortion, and money laundering.

Burglary

The unlawful entry into a building with the intent to commit a crime, typically theft.

Shoplifting

The act of stealing goods from a store by concealing them and leaving the premises without paying.