ACCA FR · Chapter 5 · Question 4 of 11
Rookery Co runs an online marketplace. During the year customers bought goods worth $50,000 through the site. Rookery Co never controls the goods, which are delivered directly by suppliers, and it passes 85% of the sale price to suppliers. What revenue should Rookery Co recognise?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $7,500
Explanation
Rookery Co does not control the goods before they pass to the customer, so it acts as an agent. An agent recognises revenue equal to its commission (the net amount it keeps): $50,000 x 15% = $7,500. Gross revenue of $50,000 would be recognised only by a principal.
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