Suppose that The GAP (a clothing retailer) sells gift certificates for merchandise. During the Christmas holiday period,

Question:

Suppose that The GAP (a clothing retailer) sells gift certificates for merchandise. During the Christmas holiday period, it issues $500,000 in gift certificates. If the company's fiscal year end is December 31, how should it recognize the issuance of these gift certificates in its at year end? Explain your answer in relation to the revenue recognition criteria.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...