Under FASB ASC 606, When Multiple Performance Obligations Exist in a Contract

question 43

Multiple Choice

Under FASB ASC 606, when multiple performance obligations exist in a contract, they should be accounted for as a single performance obligation when

• A) Each service is interdependent and interrelated
• B) Both performance obligations are distinct but interdependent
• C) The product is distinct within the contract
• D) Determination cannot be made

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Definitions:

Nitrogen Fixation

The chemical processes by which atmospheric nitrogen is assimilated into organic compounds, especially by certain microorganisms as part of the nitrogen cycle.

Earth's Seasons

Periods throughout the year characterized by changes in weather, ecology, and hours of daylight, resulting from the earth’s tilt and orbit around the sun.

Earth's Tilt

The angle between Earth's rotational axis and its orbital plane around the Sun, which significantly influences seasonal variations in climate.

Orbit

The path followed by an object revolving around another object or the cavity in the skull in which the eye and its appendages are situated.