Question

A catering company is local, conceptually when should they recognise revenue from its catering service?

Answer 1

CATERING COMPANY : in these companies, they sell their services in form of meals to their customers. they earn revenue for their services. now the question arises at what time they have to recogonise revenue from their services.

THEY WILL RECOGONISE REVENUE : AT THE DATE THE MEALS ARE SERVED

I am going to clear my point by giving you one example
EXAMPLE : ABC is catering company, they serve meals to people and get paid for their service.
on 31st dec: they served food to mr verma for $50.
on 2 jan : mr verma made payment for the food.
now they have confusion, on what date they recogonise the revenue? om 31 dec or 2 jan?

answer is 31st dec, at the date the meal is served to mr verma.