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Contracts Co is in the business of selling contracts to customers and then providing the...

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Accounting

Contracts Co is in the business of selling contracts to customers and then providing the service as needed over the term of the contract. The customers pay for the service contract at the beginning of the contract. Contracts Co believes that it does not have to record these receipts as income when the cash is received but only over the term of the contracts. Is this true? Comment.

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