The following situations require professional judgment to determine when to recognize revenue from the transactions:
1. Flamingo Airlines sells you a non-refundable airline ticket in September for your flight home at Christmas.
2. Cygman Furniture sells you a home theatre on a no money down, no interest, and no payments for one year promotional deal.
3. The Blue Hawks sell season tickets to their games on-line. Fans can purchase the tickets at any time, although the season doesn't officially begin until April. It runs from April through October.
4. Babineau Company sells merchandise with terms of 2/10, n/30, FOB destination.
5. In September, Confederation College collects tuition revenue for the term from students. The term runs from September through December.
6. The College Bookstore has the following return policy for textbook sales: "Textbooks (new and used) may be returned for seven calendar days from the start of classes. Aft er that time, textbooks (new and used) may be returned within 48 hours of purchase."
7. Computer Company sells computer soft ware. Included in the price of the soft ware is a three-year service contract to update the customer's soft ware.
Instructions
Identify when revenue should be recognized in each of the above situations.