Apple Inc.’s iTunes® provides digital products, such as music, video, and software, which can be downloaded to portable devices such as the iPhone® and iPod®. Purchases made on iTunes are made with credit cards that are on file with the credit card processing company. Such transactions are considered cash transactions. Once the purchases are made, consumers can download the requested digital products to their portable devices for their enjoyment and the charges will show up on their credit card bills.
a. What kind of e-commerce application is described by Apple iTunes?
b. Assume you purchased 12 songs for $1 each on iTunes. Provide the journal entry generated by Apple’s e-commerce application.
c. If a special journal were used, what type of special journal would be used to record this sales transaction?
d. If an electronic form were used, what type of electronic form would be used to record this sales transaction?
e. Would it be appropriate for Apple to use either special journals or electronic forms for sales transactions from iTunes? Explain.