Elizabeth runs a small retail establishment as a sole proprietorship selling computer hardware and software equipment. Elizabeth
Question:
Elizabeth runs a small retail establishment as a sole proprietorship selling computer hardware and software equipment. Elizabeth sells two servers on December 30, 2015, one to Virginia for $2,000 and a second to Dixie for $3,000.
Virginia's server is currently in stock, she takes delivery, and she pays for it with a check. Elizabeth deposits Virginia's check for $2,000 on January 2, 2016. In Dixie's situation, she also takes immediate delivery of her server, but she requests that she be billed. Elizabeth bills Dixie on January 2, 2016 and receives full payment on January 29, 2016. Dixie makes payment by check, and it is deposited by Elizabeth on January 30, 2016. If Elizabeth uses the cash method of accounting.
Select one:
a. Elizabeth reports both the $2,000 from Virginia and the $3,000 from Dixie in 2016.
b. Elizabeth reports the $2,000 from Virginia in 2015, and the $3,000 from Dixie in 2016.
c. Elizabeth reports both the $2,000 from Virginia and the $3,000 from Dixie in 2015.
d. Elizabeth can choose to report the $2,000 from Virginia and the $3,000 from Dixie in 2015.
Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik