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How is revenue? recognized

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Problem 1: Complete Electronics Inc. sells a point-of-sale computer with a two-year service contract. Complete collects $3,000 cash for the selling price of the computer and $720 for the two-year service contract. How is revenue? recognized?

Option A. Complete will record Sales Revenue of $3,720 when the computer is delivered to the customer.

Option B. Complete will record Sales Revenue of $3,000 when the computer is delivered and Service Revenue of $30 per month for 24 months.

Option C. Complete will record Sales Revenue of $1,860 per year for two years.

Option D. Complete will record Sales Revenue of $3,000 when the computer is delivered and will record revenue for the service contract as service calls are made.

Reference no: EM132618326

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