Complete Electronics Inc. sells a point - of - sale computer with a two - year service contract. Complete collects $4,000 cash for the selling price of the computer and $552 for the two - year service contract. How is revenue recognized?

A. Complete will record Sales Revenue of $4,000 when the computer is delivered and will record revenue for the service contract as service calls are made.

B. Complete will record Sales Revenue of $4,000 when the computer is delivered and Service Revenue of $23 per month for 24 months. 0 C. Complete will record Sales Revenue of $4,552 when the computer is delivered to the customer.

D. Complete will record Sales Revenue of $2,276 per year for two years.

Answer rating: 100% (QA)

As 4000 is the selling price of computer therefore it will be considered as sales reven... View the full answer