The following independent situations require professional judgment for determining when to recognize revenue from the transactions. Identify when revenue should be recognized in each of the situations. (a) Southwest Airlines sells you an advance-purchase airline ticket in September for your flight home in December. select the accounting period DecemberOctoberSeptember (b) Ultimate Electronics sells you a home theater on a “no money down and full payment in three months” promotional deal. select the accounting period At time of deliveryIn one yearMonthly for 1 year (c) The Toronto Blue Jays sell season tickets online to games in the Skydome. Fans can purchase the tickets at any time, although the season doesn’t officially begin until April. The major league baseball season runs from April through October. select the accounting period Per game basis over the seasonOctoberApril (d) RBC Financial Group loans money on August 1. The loan and the interest are repayable in full in November. select the accounting period AugustNovemberEvenly over the loan term (e) In August, a customer orders a sweater from the Sears website using a Sears credit card. The sweater arrives in September. Sears sends a bill in October and receives payment in October. select the accounting period OctoberSeptemberAugust

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The following independent situations require professional judgment for determining when to recognize revenue from the transactions.

Identify when revenue should be recognized in each of the situations.

(a)	Southwest Airlines sells you an advance-purchase airline ticket in September for your flight home in December.	select the accounting period DecemberOctoberSeptember
(b)	Ultimate Electronics sells you a home theater on a “no money down and full payment in three months” promotional deal.	select the accounting period At time of deliveryIn one yearMonthly for 1 year
(c)	The Toronto Blue Jays sell season tickets online to games in the Skydome. Fans can purchase the tickets at any time, although the season doesn’t officially begin until April. The major league baseball season runs from April through October.	select the accounting period Per game basis over the seasonOctoberApril
(d)	RBC Financial Group loans money on August 1. The loan and the interest are repayable in full in November.	select the accounting period AugustNovemberEvenly over the loan term
(e)	In August, a customer orders a sweater from the Sears website using a Sears credit card. The sweater arrives in September. Sears sends a bill in October and receives payment in October.	select the accounting period OctoberSeptemberAugust

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