Fassino Wholesale Corporation ("Fassino's") operates discount retail stores.To shop in a Fassino's store, customers must pay a nonrefundable, annual membership fee in advance, using either cash or an American Express card.A customer purchases an annual membership from Fassino's for $120, a 20-pack of paper towels for $10.99, and four new tires for $480.The tire purchase includes mounting and aligning by a Fassino's tire technician at the time of initial installation and alignment and tire rotation services for three years afterward.The customer pays with an American Express card.
When should Fassino's recognize revenue from selling the paper towels?

Question

Quizplus · Accepted Answer

Fassino's will recognize revenue from the sale of paper towels at the time of sale, as this is when the customer takes possession of the product and the revenue can be reliably measured. The other options are not appropriate as they do not align with the revenue recognition principle.

Fassino Wholesale Corporation ("Fassino's") Operates Discount Retail Stores