Answer :
Tracy Company, a manufacturer of air conditioners, likely used the following method of accounting when selling 150 units to Thomas Company: 1) Gross method
The answer is option~1
- The gross method of accounting is a common approach used by companies when recording sales transactions. Under this method, the revenue recognized is based on the full selling price of the goods sold, without deducting any discounts or allowances.
- When Tracy Company sold 150 units to Thomas Company, they would record the revenue based on the full selling price of the air conditioners without adjusting for any discounts or allowances given.
- Using the gross method provides a straightforward and transparent way to account for sales transactions without factoring in any discounts or deductions, making it a likely choice for the sale of units to Thomas Company by Tracy Company.
The answer is option~1
