Smart Touch Learning normally performs e-learning services for $500. However, Smart Touch Learning performed services for a client for a discounted price of $400. According to the revenue recognition principle, Smart Touch Learning would record this revenue for $400. True or false?

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Business

26 July, 08:39

Smart Touch Learning normally performs e-learning services for $500. However, Smart Touch Learning performed services for a client for a discounted price of $400. According to the revenue recognition principle, Smart Touch Learning would record this revenue for $400. True or false?

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Mohammed James · Answer 1

TRUE

Explanation:

According to the revenue recognition it will follow an accrual basis. It record the revenue as earned as the services were perform during the current accounting period.

It will recognize revenue for 400 as it was the amount the parties agree upon.

The common fee's of Smart Touch uhsually are irrelevant.