Why Did the FASB Issue Accounting Standards Update No

question 48

Multiple Choice

Why did the FASB issue Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers?"

• A) To bring consistency to the recognition of revenue.
• B) To prohibit the use of bad debt expense.
• C) To allow a wide array of revenue recognition methods based on industry preferences.
• D) To encourage entities to be more forgiving of bad debt.
• E) To give entities more flexibility in how and when they recognize revenue.

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Definitions:

Evaporation

The process by which a liquid changes into a gas, typically below its boiling point, at the surface of the liquid.

Filtering

A process of separating solids from liquids or gases using a medium that allows only the fluid to pass through.

Sodium Chloride

A white crystalline substance commonly known as salt, comprised of sodium and chloride ions.

Compound

A substance made up of atoms of two or more different elements joined by chemical bonds.