All of the Following Situations Contribute to the Need for a Company

question 47

Multiple Choice

All of the following situations contribute to the need for a company to recognize deferred revenues,except for

• A)partially executed contracts between buyers and sellers.
• B)the requirement by sellers for the prepayment of goods and services.
• C)mutually unexecuted contracts between buyers and sellers.
• D)the seller has collected a deposit but has an outstanding performance obligation under the contract.

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Definitions:

Convey Information

The act of communicating or transmitting information from one entity to another.

Service Industries

Sectors of the economy that provide intangible products such as healthcare, education, and financial services.

Monopolistically Competitive

Describes a market structure where many companies sell products that are similar but not identical, allowing for competition based on price, quality, and marketing.

Profit-maximizing Price

The price level at which a company can make the maximum possible profit on its products or services, based on the dynamics of supply and demand.