In each of the following situations, state at which date(s), if any, revenue will be recognized. Explain
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Question:
In each of the following situations, state at which date(s), if any, revenue will be recognized. Explain your reasoning.
- A contract for the rendering of services is entered into on 1 May 2023. The services are delivered on 15 May 2023. The buyer pays for the service on 30 May 2023. The services are covered by a special warranty which expires on 30 June 2023. The special warranty allows for the goods to be returned and a refund received.
- A contract for the sale of good is entered into on 1 May 2023. The goods are delivered to the buyer for one month`s evaluation on 15 May 2023. If the buyer is happy with the goods the contract provides for further sales each month. The buyer pays for the evaluation on 3 May 2023. The evaluation goods are returnable under normal warranty conditions until 30 June 2023.
- A contract for the rendering of services is entered into 1 May 2023. The services are delivered continuously over a 1 year period commencing on 15 May 2023. The buyer pays for the services on a monthly basis, commencing on 15 May 2023. The buyer may revoke the agreement at any time.
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