Which of the Following Statements Regarding Contracts Is INCORRECT

question 54

Multiple Choice

Which of the following statements regarding contracts is INCORRECT?

• A)The process of revenue recognition is based on contracts that the entity has with outsiders.
• B)A contract is an agreement between two parties that creates enforceable rights or performance obligations.
• C)Only written contracts are valid.
• D)Identifying the contract with the customer is the first step of the revenue recognition model.

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Definitions:

Yearly Income

The total amount of money earned by an individual or entity in one year from all sources.

SST

Sum of Squares Total, a measure in statistics used to quantify the variability within a dataset.

Sum Of Squares

A statistical measure used to describe the dispersion or variability within a data set, calculated as the sum of the squared differences from the mean.

Error

The difference between the observed value and the true value due to measurement or estimation inaccuracies.