What is the entry to record the receipt of cash

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Reference no: EM132661581

Question - On January 5, 2018, Win Company enters into a cancellable contract to transfer product G to Mr. Gray on April 5, 2018. The contract requires that Mr. Gray pay consideration of $2,000 in advance on January 15, 2018. Mr. Gray pays the consideration on March 5, 2018. Then Win delivered the product on March 31, 2018.

Q1. What is the entry on January 15, 2018 when payment of the contract is due?

a. Receivable 2,000 Contract Liability 2,000

b. Receivable 2,000 Revenue 2,000

c. Contract Liability 2,000 Revenue 2,000

d. No Entry

Q2. What is the entry to record the receipt of cash of $2,000 on March 5, 2018?

a. Cash 2,000 Revenue 2,000

b. Cash 2,000 Receivable 2,000

c. Receivable 2,000 Revenue 2,000

d. Cash 2,000 Contract Liability 2,000

Q3. What is the entry on March 31, 2018 to record satisfaction of performance obligation?

a. Cash 2,000 Receivable 2,000

b. Receivable 2,000 Revenue 2,000

c. Contract Liability 2,000 Revenue 2,000

d. No Entry

Reference no: EM132661581

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