What is the total sales revenue recognized from the two transactions before tax?

What is the total sales revenue recognized from the two transactions before tax?

• A. 9,000
• B. 9,500
• C. 10,000
• D. 9,800

Answer: (B)

The main idea is that when you have two separate sales, you recognize revenue for each sale the moment the performance obligation is satisfied, and then you add those amounts together to get total revenue before tax. In other words, total revenue from multiple transactions is simply the sum of the pre-tax revenues from each transaction, with any sales tax excluded from this total. If there were discounts or returns, you would subtract those from the respective sale amounts to arrive at the revenue recognized for each transaction, but taxes are not part of revenue. So the correct choice reflects the sum of the two pre-tax sale amounts, which is why that option is the right one.

The main idea is that when you have two separate sales, you recognize revenue for each sale the moment the performance obligation is satisfied, and then you add those amounts together to get total revenue before tax. In other words, total revenue from multiple transactions is simply the sum of the pre-tax revenues from each transaction, with any sales tax excluded from this total. If there were discounts or returns, you would subtract those from the respective sale amounts to arrive at the revenue recognized for each transaction, but taxes are not part of revenue. So the correct choice reflects the sum of the two pre-tax sale amounts, which is why that option is the right one.