Question

In the Month of March, Baldwin Corporation received orders of 191 units at a price of $15.00 for their product Bid. Baldwin uses the accrual method of accounting and offers 30 day credit terms. Baldwin delivers 128 units in March and the balance of 64 units in April. They received payment for 64 units in March, 64 units in April, and 64 units in May. How much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands)
Select: 1
$1,920 , $960
0 , $2,865
$2,865 , 0
$960 , $960

Answer 1

Answer=$1,920 , $960

Cost per unit =$15.00

Month	Sales	Revenue received for	Revenue in income statement	Total revenue
March	128 units	64 units	128 x15	1920
April	64 units	128 units	64x15	960
May		64 units

Explantion:

Accrual accounting is a method of accounting where revenue and expenses are recorded when the transaction takes place.

Accrual method records payment when it occurs rather than when it is received.

It follows the matching principle which says revenues and expense should be recorded in the period that they occur

.