Discuss when each of the following types of businesses should likely recognize revenue: A software company...
Discuss when each of the following types of businesses should likely recognize revenue:
A software company such as Microsoft when significant production, modification, or customization does not exist.
A clothing retailer like JCPENNY
Homework Answers
- For software company when significant production, modification, or customization does not exist, the revenue will be recorded as a whole in books of A/c. Revenue is allocated in total no of years in which significant production, modification, or customization is going on. Therefore, if there is no pending production, modification, or customization then we have to record revenue in books of A/c.
- For clothing retailer, revenue will be recorded in books of A/c when there is no uncertainty in collection, title in goods has been transferred.
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