You and your friends are taking a two-week trip to Paris, France, from June 1 to 15,
Question:
You and your friends are taking a two-week trip to Paris, France, from June 1 to 15, 2020. On May 1, 2020, you booked and prepaid for your stay at Hotel de Paris for $300 per night for 14 nights. Based on the hotel policies, the booking is non-refundable.
1. What product or service is being sold? When does Hotel de Paris fulfill its performance of providing its product or service?
2. Can Hotel de Paris measure the amount of accounts receivable and revenue for the above transaction? Explain.
3. Is it probable that Hotel de Paris will collect payment from you and your friends for your hotel booking? Explain.
4. Based on your analysis, determine when Hotel de Paris should recognize the revenue.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
1 Hotel de Paris is selling the service of providing a 14 night stay at the hotel Ho...View the full answer
Fundamental Accounting Principles Volume I
ISBN: 978-1260305821
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
