Recognize Revenue from the transactions

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Sep 22, 2007, 04:31 PM

tomlinsi58

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Join Date: Sep 2007

Posts: 1

Recognize Revenue from the transactions

How do I identify when revenue should be recognized for the following?

Southwest Airlines sell you an advance-purchase airline ticket in September for your flight home at Christmas.

Ultimate Electronics sells you a home theatre on a "no money down, no interest, and no payments for one year" promotional deal.

Help! Thanks

Answers

Sep 22, 2007, 05:43 PM	#2

CaptainForest Finance & Accounting Expert Join Date: Nov 2005 Location: Canada Posts: 3,672	There would be no revenue to record, since you are the one purchasing the items. If you are wondering when Southwest and Ultimate records the sales….that is subjective, based on many additional factors. Based on the information you provided… I would say to book the revenue in December for Southwest and right now for Ultimate.

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