During the current year, First Flex Corporation sold $1,250,000 in goods that cost $750,000. Cash sales were $500,000 and credit sales $750,000. First Flex collected $500,000 of the credit sales during the year. What amount of revenue should Flex recognize for the year under the revenue recognition principle?
A) $1,250,000
B) $ 500,000
C) $ 750,000
D) $ 1,000,000

Question

Quizplus · Accepted Answer

Under the revenue recognition principle, revenue is recognized when it is earned, regardless of when cash is received. First Flex Corporation earned $1,250,000 in revenue from both cash and credit sales during the year.

During the Current Year, First Flex Corporation Sold $1,250,000 in Goods