The revenue recognition principle The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed. Transaction price: Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows: Variable amount of consideration and the restriction on its recognition Rights for sales return Whether the seller is acting as a principle or an agent Time value of money Payments by the seller to the customer To identify: The amount of transaction price that should Company T assign to the basis of the Elite travel package from the given option.

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Chapter 5, Problem 3CPA

To determine

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition

Rights for sales return

Whether the seller is acting as a principle or an agent

Time value of money

Payments by the seller to the customer

To identify: The amount of transaction price that should Company T assign to the basis of the Elite travel package from the given option.

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