As I inserted the 10 dollar bill into the token machine at Chuck E. Cheese’s I had the same thought that most people have – when does CEC recognize the revenue for this transaction. J Now that their token machine has my money does it mean that the earnings process is complete? Maybe it’s a moot point because it did not take long for my son and I to rid ourselves of the tokens. Within about 15 minutes the tokens were absorbed by the arcade games. CEC could then safely claim that the earnings process was complete. So, they could book the $10 of revenue at that time. It’s a good thing for CEC that we did not decide to leave with a few tokens in our pocket. That type of thing could play havoc on their accounting system.
But what about all those tickets that we earned? My son did not find anything that he wanted to trade for the number of tickets that we had, so, we will just hold onto them until we come back next time. After we get another $10-$20 in tokens and toss a few more skee-balls, he should have enough tickets to get the model car that he was eyeing. In the meantime, CEC management will have to sleep at night knowing that I already hold enough tickets to claim several small plastic toys from their gift shop.
Note: CEC annual reports provide an explanation of how they account for these transactions.
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