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FRA - Understanding Balance Sheet - Revenue Recogniton
This is one of the questions under concept checkers whose answer i didn't seem to agree with or completely understand. So i am putting it here to get everyone's views.
Q. How should the proceeds received from the advance sale of tickets to a sporting event be treated by the seller, assuming the tickets are nonrefundable?
A. Unearned revenue is recognized to the extent that costs have been incurred.
B. Revenue is recognized to the extent that costs have been incurred.
C. Revenue is deferred until the sporting event is held.
The correct answer is C.
All my vices are devices.