Question

on march 17, jackal lumber sold building materials to frendo limited for $15,000 with terms of 3/10, n/20. what amount did jackal record as revenue on march 25 when frendo paid for the building materials?

Answer 1

The amount paid by the frendo for the building materials is $0.

What is Revenue?

Revenue is the amount of money that a company makes from its assets. Sales or services create operational revenues, which are reported at the beginning of the income statement.

When the bill was issued on March 17th, Jackal Company registered the income for the sale. According to GAAP (Generally Accepted Accounting Principles), the revenue is recognized when earned, hence the collection on March 25th only acknowledges the settlement of the invoice, not the revenues for the labor.

Hence, $0 is paid for the building material.

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