REVENUE RECOGNITION Volume Electronics sold a television to Sarah Merrifield on December 15, 2009. Sarah paid $100 at the time of the purchase and agreed to pay $100 each month for five months beginning January 15, 2010. The television had been purchased by Volume Electronics at a cost of $450 in June 2009. Volume had paid the $450 in August 2009.

Required:

Determine in what month or months revenue from this sale should be recorded by Volume Electronics to ensure proper application of accrual accounting.

Exercise