Case 3-1 Accrued revenue The following is an excerpt from a conversation between Monte Trask and Jamie Palk just before they boarded a light to Berlin on American Airlines. They are going to Berlin to at tend their company's annual sales conference, Monte Jame, ren't you taking an introductory accounting course college Jante: Yes, I decided it's about time I learned something about accounting. You know, our annual bonuses are based on the sales figures that come from the accounting department Monte: I guess I never really thought about it Jantle You should think about. It Last year, I placed a $900,000 order on December 27. But when I got my bonus, the $900,000 sale wasn't included. They said it didn't ship until January 5, so it would have to count in next year's bonus. Monte A real bummert Janvie: Right I was counting on that bonus including the $900,000 sale. Monte Did you complain? Jawle: Yes, but it didn't do any good. Sophia, the head accountant, said something about match- ing revenues and expenses. Also, something about not recording revenues until the sale is final I figured to take the accounting course and find out whether she's just jerking me around Moni: I never really thought about it. When do you think American Airlines will record its ROVER from the night Jamie Hmmm, I guess it could record the revenue when it sells the ticket ... or when the boarding passes are taken at the door or when we get off the plane... or when our com pany pays for the tickets.. or I don't know. I'll ask my accounting Instructor Discuss when American Airlines should recognize the revenue from ticket sales to properly match revenues and expenses