Which of the Following Is Not a Step in the Recognition

question 20

Multiple Choice

Which of the following is not a step in the recognition of revenue?

• A) Recognise revenue when the entity satisfies a performance obligation.
• B) Allocate the buying price to the goods or services.
• C) Identify the performance obligation.
• D) Determine the transaction price.

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Definitions:

Reasonable Grounds

A basis of sufficient facts and information indicating that a belief or action is more likely true or correct than not, often used in legal contexts.

Shipment Contract

A contract in which the seller is obligated to send the goods to the buyer but is not responsible for loss or damage to the goods once they have been shipped.

Destination Contract

A legal agreement specifying that the seller of goods will bear the risk and expense until the goods are delivered to a specific location.

Seller Obligations

Refers to the responsibilities and duties a seller must fulfill as part of a sales contract, including delivering the goods or services as agreed.