Question
Sally is a college student who decided that she spends entirely too much time inside of the library studying . She decided to join a
Sally is a college student who decided that she spends entirely too much time inside of the library studying . She decided to join a health club in order to become more active . After researching several Health Clubs and Gyms, Sally decided to purchase a membership at Deseret Health Club Sally bought a contract for one year . Upon signing this contract, Sally agreed to pay an upfront membership feewhich will ensure use of the health facilities during the full year . She also agreed to pay a monthly fee that will be paid at the beginning of each month during the length of the contract . Assume that the up-front fee does not relate to a specific activity and is nonrefundable , when is the best time for Deseret Health Club to recognize the revenue for the up-front fee paid by Sally ?
A. Recognize it six months after the contract is signed
B. Recognize it at the end of one year (at the end of Sally's contract)
C. Allocate it over the life of the contract and recognize it as time passes
D. Recognize it as soon as cash is received from Sally
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