Reference no: EM132667669

Problem 1) For a firm that provides services, revenue is recognized when:

A.The firm receives the purchase order

B. The customer pays for the purchase

C. Services are rendered to the customer

D. The customer signs the service contract

E. The firm sends an invoice to the customer

Problem 2) Walmart's 2020 annual report said the following about its gift card sales:

"Customer purchases of gift cards are not recognized as sales until the card is redeemed and the customer purchases merchandise using the gift card."

When a customer purchases a gift card from Walmart, what impact does this have on Walmart's financial statements?

A. Cash increases and revenue increases

B. Cash increases and inventory decreases

C. Cash increases and deferred gift card revenue increases

D. Cash decreases and revenue decreases

E. Cash decreases and accounts payable decreases