Part II: Revenue Recognition Criteria What are Amazon's two main types of revenue on its income statement? Which one is bigger in 2021? Explain the accounting rationale behind deferring revenues. In which section of Amazon's balance sheet do deferred revenues show up? Why? When does Amazon recognize purchase price of consumer products, and shipping costs as an expense? Which accounting principle requires this kind of treatment? When does Amazon recognize marketing expenses? How is this treatment different from that of cost of goods sold? ASSETS December 31, 2020 2021 Current assets: Cash and cash equivalents Marketable securities Inventories Accounts receivable, net and other Total current assets Property and equipment, net $ 42,122 $ 36,220 42,274 59,829 23,795 32,640 24,542 32,891 132,733 161,580 113,114 160,281 Operating leases 37,553 56,082 Goodwill 15,017 15,371 Other assets 22,778 27,235 Total assets $ 321,195 $ 420,549 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other Unearned revenue Total current liabilities $ 72,539 S 78,664 44,138 51,775 9,708 11,827 126,385 142,266 52,573 67,651 31,816 48,744 17,017 23,643 Long-term lease liabilities Long-term debt Other long-term liabilities Commitments and contingencies (Note 7) Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares-500 Issued and outstanding shares-none Common stock, $0.01 par value: Authorized shares-5,000 Issued shares-527 and 532 Outstanding shares-503 and 509 Treasury stock, at cost Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings (1,837) (1,837) 42,865 55,538 (180) (1,376) 52,551 85,915 Total stockholders' equity 93,404 138,245 Total liabilities and stockholders' equity $ 321,195 $ 420,549