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12 December, 10:07

During a discount sale, Larry buys a CD from Best Buy. Rather than paying cash, Larry uses his Best Buy card to buy the CD on account. Under the accrual basis of accounting, when will Best Buy record revenue from this sale?

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  1. 12 December, 12:47
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    at the moment of sale. Right there.

    Explanation:

    As the business is using an accrual basis it will recognize both, income and expense when they occur. This sale occurs at the moment Larry receive the CD and so, the sales is complete. It will be disclosure and recognize in the income statement. The payment date is not relevant under accrual basis

    Same will occur with expenses, when the period past or supplies are used, the expense will be recognize regardless of the payment date.
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Home » Business » During a discount sale, Larry buys a CD from Best Buy. Rather than paying cash, Larry uses his Best Buy card to buy the CD on account. Under the accrual basis of accounting, when will Best Buy record revenue from this sale?
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