Question

On 24 March 2020, Callum Trading received $8,500 from a customer as down-payment for an order of goods amounting to $92,000. Which of the following is recorded in the books of Callum Trading for the financial year ended 31 March 2020 with regards to the above transaction? Current liability of $92,000. Expense of $8,500. Revenue of $92,000. Current liability of $8,500.

          On 24 March 2020, Callum Trading received $8,500 from
a customer as down-payment for an order of goods
amounting to $92,000. Which of the following is
recorded in the books of Callum Trading for the financial
year ended 31 March 2020 with regards to the above
transaction?
Current liability of $92,000.
Expense of $8,500.
Revenue of $92,000.
Current liability of $8,500.

On 24 March 2020, Callum Trading received 8,500 from
a customer as down-payment for an order of goods
amounting to92,000. Which of the following is
recorded in the books of Callum Trading for the financial
year ended 31 March 2020 with regards to the above
transaction?
Current liability of 92,000.
Expense of8,500.
Revenue of 92,000.
Current liability of8,500.

Added by Christopher B.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert William Voeller

Step 1

The customer gave Callum Trading a down payment for an order of goods. This means that Callum Trading has received money in advance for goods that have not yet been delivered. Show more…

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On 24 March 2020, Callum Trading received $8,500 from a customer as a down payment for an order of goods amounting to $92,000. Which of the following is recorded in the books of Callum Trading for the financial year ended 31 March 2020 with regards to the above transaction? A. Current liability of $92,000 B. Expense of $8,500 C. Revenue of $92,000 D. Current liability of $8,500