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Accountancy

Explain how to recognize the revenue if you have the information below. Use a boldface type for important accounting terminologies or words in your report.

The A company sells copy machine at a sales price of JPY1,500,000 per unit. The sales price includes delivery and installation. It also gives a maintenance service (6 years) in which a technician checks to make sure that the machine is working properly with a price of JPY 500,000 (one-time prepayment). The A company has started a promotion campaign in which the maintenance service (6 years) will be offered for free to a client that buys a copy machine of JPY 1,728,000. The A company has made a contract to sell a copy machine with the maintenance service (6 years) to B company by JPY 1,728,000.

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