There are many situations in business where it is difficult

to determine
There are many situations in business where it is difficult to determine the proper period in
which to record revenue. Suppose that after graduation with a degree in finance, you take a job
as a manager at a consumer electronics store called Atlantis Electronics. The company has
expanded rapidly in order to compete with Best Buy and Circuit City. Atlantis has also begun
selling gift cards. The cards are available in any dollar amount and allow the holder of the card
to purchase an item for up to 2 years from the time the card is purchased. If the card is not used
during that 2 years, it expires.InstructionsAnswer the following questions. At what point should
the revenue from the gift cards be recognized? Should the revenue be recognized at the time
the card is sold, or should it be recorded when the card is redeemed? Explain the reasoning to
support your answers.View Solution:
There are many situations in business where it is difficult to determine
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