Question
When a customer places an order, Custom Cakes requires a deposit equal to the full purchase price. However, Custom Cakes does not recognize revenue until
When a customer places an order, Custom Cakes requires a deposit equal to the full purchase price. However, Custom Cakes does not recognize revenue until the cake is delivered. The balance in the unearned cake revenue account on November 1, 2015 was $4,000. During the month of November, Custom Cakes received $24,000 in customer deposits. The balance of its unearned cake revenue account was $6,000 at the end of November. How much revenue did Custom Cakes recognize during the month of November?
a) $24,000
b) $22,000
c) $4,000
d) None of the above
e) $26,000
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