A certain reservationist receives a call and makes a reservation for one room night for a future hotel guest. The traveler uses a credit card to guarantee the reservation, but no amount is charged to the traveler’s account. From an accounting standpoint, a sale ___________ and the event ____________. Group of answer choiceshas not been made; should not be recordedhas been made; should not be recordedhas not been made; should be recordedhas been made; should be recorded
Question
A certain reservationist receives a call and makes a reservation for one room night for a future hotel guest. The traveler uses a credit card to guarantee the reservation, but no amount is charged to the traveler’s account. From an accounting standpoint, a sale ___________ and the event ____________. Group of answer choiceshas not been made; should not be recordedhas been made; should not be recordedhas not been made; should be recordedhas been made; should be recorded
Solution 1
From an accounting standpoint, a sale has not been made; should not be recorded. This is because the transaction is not complete until the service (the hotel stay) is provided and the payment is received. The reservation is simply a promise of future payment, not an actual sale. Therefore, it should not be recorded as such in the accounting books.
Solution 2
From an accounting standpoint, a sale has not been made; should be recorded. This is because the reservation is a commitment from the guest to pay in the future, but no actual transaction has taken place yet. However, the event should be recorded to keep track of future expected income.
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