solution

Esther knows from her accounting classes that revenues must be recognized only when they are earned. However, her boss wants to show that the theme park is doing well in June and asks Esther to recognize a $9,000 revenue entry related to a group he has booked for the next January. A contract has been signed with a provision that if the group cancels for any reason, it will pay the theme park a $1,000 fee. Esther’s manager believes that because of this clause, this group will definitely show up, so recognizing the revenue earlier than January is of no consequence. What would you do if you were Esther?