Complete Electronics Company Sells a Point-Of-Sale Computer with a Two-Year

question 95

Multiple Choice

Complete Electronics Company sells a point-of-sale computer with a two-year service contract.Complete collects $2,000 cash for the selling price of the computer and $504 for the two-year service contract.How is revenue recognized?

• A) Complete will record Sales Revenue of $2,504 when the computer is delivered to the customer.
• B) Complete will record Sales Revenue of $1,252 per year for two years.
• C) Complete will record Sales Revenue of $2,000 when the computer is delivered and Service Revenue of $21 per month for 24 months.
• D) Complete will record Sales Revenue of $2,000 when the computer is delivered and will record revenue for the service contract as service calls are made.

---

Definitions:

Advertising Campaign

An advertising campaign is a series of advertisement messages that share a single idea and theme which make up an integrated marketing communication (IMC).

Chocolate Covered Almonds

A confectionery product consisting of almonds coated in chocolate, often served as a sweet snack.

Manufacturing Costs

Expenses directly associated with the production of goods, including materials, labor, and factory overhead.

General Ledger

The general ledger is a comprehensive record of a company's financial transactions over the life of the organization, which is the foundation of a company's double-entry accounting system.