Facts In order for you to have a better understanding on matters of revenue as they have some impacts and implications on your company, the following facts are important related to revenue and issue of taxation as per the provisions of GAAP operations, especially concerning advance payments.   * In accounting practices, revenues are categorized under two classes: earned and unearned revenue depending upon the actual point of payment and the actual point of delivery of the service or goods, that is, within GAAP operation, advanced payments are not recognized as revenues on reception (Kieso, Weygandt, and Warfield 115).   * A GAAP operation holds that revenues are earned after a complete transfer of services or goods has been done as indicated by the issuance of an invoice.   * For contracts with multiple deliverables, each contract ought to be considered as a unit in the accounting system, except when an organization has specified the values of each deliverables according to vendor’s objectivity. While considering this fact of a unit contract delivery, revenue related to previous deliverables could be deferred to be recognized with deliverables that follows afterward.   * Service revenues are not determined through the use of percentage of completion system except where the service(s) is a construction related service, meaning that it is found within the scope of SOP 81.1   * Under the law of taxation, there is no use of percentage completion method except for services with such occurrence or those leading to mitigation of the performance of long-term contract. Revenues are recognized for taxation use when owed, paid/ received.   * The subscription fee charged by the Pet smart Inc. organization is a prepayment; hence, Pet smart Inc. will have initially received revenue from scribers for their products   * Subscribers have different subscription durations range from 1-year to 3-years, and therefore there is coverage of different trading periods.   * The subscription fee for each category is different according to duration. Issues   * The first thing arising here is to determine whether the generated revenue has to be treated like any other ordinary revenue. In this case, it is important to get the understanding of the accounts affected in order to make the correct accounting entries necessary for revenue and tax evaluation. This in particular entails assessing the major accounting entry category of assets and liabilities and the specific point of entry as either debit or credit side of the particularly account entry.   * The second issue is the treatment of the various durations of the various subscribers for which it can be specified on a particularly trading period or may be deferred to cover several trading periods. Evaluation of Authority: one section for GAAP and one section for tax Section for GAAP: Revenue according to nature deliverables In the assessment of the nature of the contract, Pet Smart Inc has entered into trading with several clients whose contracts were considered to have multiple deliverables. While focusing on monthly deliveries, the 1-year contract will be treated as having multiple monthly deliverables but a single unit c