Air Yukon sells you an advance purchase airline ticket through your credit card in September for $1100 for your flight home at Christmas in December. You receive and pay the credit card bill in October. Revenue was recorded in September. The company awards a bonus to its sales agents based on revenues. The company year end is September 30^th.

INSTRUCTIONS

a. Who are the users of the financial statements and what are their financial reporting/ decision making needs?

b. Assume the company follows ASPE, provide a GAAP supported-case specific analysis.

c. Assume the company follows IFRS, provide a GAAP supported-case specific analysis.

d. Explain which the accounting framework you like best (i.e. IFRS or ASPE) and why? Based on this selection, recommend when the company should record revenue for this scenario and the impact your recommendation will have on the company financial statements.

e. Give the correcting journal entry needed based on your recommendation.

Answer rating: 100% (QA)

Answer Revenue is recognised when earned irrepective of when the cash is ... View the full answer