According to FASB, Initial Franchise Fees Should Be Recognized as Income

question 37

Multiple Choice

According to FASB, initial franchise fees should be recognized as income when:

• A)the franchiser has substantially performed or satisfied all material services and conditions.
• B)the franchiser has collected the majority of fee in cash.
• C)the franchisee shows the ability to pay the fee.
• D)the franchiser bills the franchisee.

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Definitions:

Status

The current condition or situation of a project, person, or entity, often used to indicate progress or standing.

Self-actualization

The act of achieving or fulfilling one's capabilities and aspirations, seen as a natural motivator or requirement within each person.

Belonging

The feeling of being accepted and included in a group or community.

Persuasive Messages

Communications designed to convince or influence the audience to adopt a certain perspective, take an action, or change a belief.