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How should these flight ticket sales be accounted

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Reference no: EM133153310

Question - You have just been hired as the Chief Financial Officer for a new small airline company called LeotisWest.  In order to improve sales, the company will offer seat sales months in advance of when the flight is to take place.  You have been asked to address the following two issues (be sure to discuss relevant GAAP):

How should these flight ticket sales be accounted for and when should they be recognized as revenue? Be specific and explain in detail.

When should SteveWest recognize flight expenses, such as aircraft fuel and flight crew's salaries for flights related to these sales? Be specific and defend with strong rationale.

Reference no: EM133153310

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