请老师帮忙解答一下

问题如下：

QuestionA company sells a non-refundable, two-year service contract for €420. Based on historical patterns, the company expects to incur 25% of service costs in the first year of the contract and the remainder in the second year. The amount of revenue the company recognizes in the first year is closest to:

选项：

A.€ 105.00

B.€ 420.00

C.€ 210.00

解释：

Solution

A is correct. Service revenues are recognized by reference to the stage of completion of the service contract. Historical patterns provide evidence that 25% of the services performed under the contract are incurred during the contract’s first year. As such, only 25% of the contract revenue would be recognized in the first year:

B is incorrect. This calculation incorrectly implies that all of the services provided under the warranty have been rendered by the end of the first year.

C is incorrect. This calculation incorrectly implies that half of the services provided under the warranty have been rendered by the end of the first year. In fact, historical experience indicates that only 25% of the services provided will have been rendered by the end of that year.