Each of the following situations relates to the recognition of revenue:
a. A store sells a gift card in December which will be given as a Christmas present. The card is not redeemed until January.
b. A furniture store sells and delivers furniture to a customer in June with no payments and no interest for six months.
c. An airline sells an airline ticket and collects the fare in February for a flight in March to a spring break destination.
d. A theme park sells a season pass and collects the cash in January which allows entrance into the park for an entire year.
e. A package delivery service delivers a package in October but doesn’t bill the customer and receive payment until November.
Required:
For each situation, indicate when the company should recognize revenue.