Accrual accounting matching principle12/5/2023 ![]() Since all the criteria has been met to recognize the revenue, the $400 of ticket revenue will be recognized evenly across all 20 home games as they occur.Īs another example, the fall semester has started and the student tuition is due to bursar. Are the costs to provide and the sales cost of the basketball games known (Measurability)? Yes, the fan was aware of the price the season tickets were being sold for, $400, before purchasing the tickets.Will the amount be collectable (Collectability)? Since IU processes payment via credit card or through a student bursar account most typically, there is reasonable assurance that the money will be received as payment is automatic.Have the tickets been sold to the customer (Performance)? When the fan purchased his season tickets online, the service had been sold to the customer and a record of sale (confirmation email or receipt) has been sent to confirm the purchase. ![]() To properly recognize the revenue related to the basketball season tickets, IU would ensure the below criteria are met: This means an amount has been set to provide the service/sell the item – the cash does not have to be received to book the revenue earned.Īn IU basketball fan purchases season tickets for the upcoming season for a total of $400 and there are 20 home games a season.
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