When is a sale a sale? When does the accounting system recognise revenue as having been earned? Indicate what you think would be the revenue recognition policy in each of the following cases. Remember to think about: (a) whether the general criteria for revenue recognition have been met; (b) the concept of a ‘critical event’ for revenues recognised all at once; and (c) the proportionate recognition that is available for revenue earned over several accounting periods:

1. 1  coffee shop sales of coffee

2. 2  sales of housing subdivisions

3. 3  sales of natural gas to businesses and residences

4. 4  magazine subscription sales

5. 5  ticket sales for concerts

6. 6  revenue from sales of pottery on consignment through local craft shops

7. 7  a TV station’s revenue from advertising during sports programs

8. 8  revenues from sales of manufactured plumbing products

9. 9  computer store sales of software

 

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It is required to define what is sale When does the accounting system recognize revenue as earned and also to categorize certain sale transaction under the following criterion as under a General reven... View the full answer