Revenue Recognition Alternatives Each of the following independent situations relates to the recognition of revenue:
a. Interest on loans made by a bank
b. Interest on loans made by a bank when the loans are in default
c Collection of fares by an airline when the passengers make the reservations
d Shipment of freight and mail by an airline before it receives payment
e Imposition of a penalty (service charge) by a retailer on overdue accounts
f. Building a submarine for a foreign government
g. Selling lots for vacation homes on long-term contracts with small down payments
h. Building houses in a subdivision
i. Growing timber over a 10-year period
j. Rental of a building to another company for 5 years, with no payment of rent in the first year
k. Sale of a season pass by a ski resort
Required:
For each situation indicate when a company should recognize revenue.