Descriptions of two companies in different lines of business

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The following are brief descriptions of two companies in different lines of business.

A. Company A is a retailer. I makes sales on a daily basis for cash and on credit cards.

B. Company B is a health spa. It has recently signed contracts with numerous individuals to use its facilities over a two-year period. The contract price was collected in advcance.

Required:

Describe when revene should be recognized by each company. If revenue should not be recognized at the time of sale, indicate what method should be used to recognize the revenue. Justify your decision.

Reference no: EM131224123

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