In February of each year, the Carlton Hotel holds a very popular wine tasting event. Tickets must be ordered and paid for in advance, and are typically sold out by November of the preceding year. The recognition principle indicates that the revenue from these ticket sales should be recognized in the period in which the:

Question

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The recognition principle states that revenue should be recognized in the period in which the service is provided or the product is delivered. In this case, the wine tasting event is the service being provided and therefore the revenue from the ticket sales should be recognized in the period in which the event is held, which is choice B.

In February of Each Year, the Carlton Hotel Holds a Very