The Installment-Sales Method of Recognizing Profit for Accounting Purposes Is

question 11

Multiple Choice

The installment-sales method of recognizing profit for accounting purposes is acceptable if

• A) collections in the year of sale do not exceed 30% of the total sales price.
• B) an unrealized profit account is credited.
• C) collection of the sales price is not reasonably assured.
• D) the method is consistently used for all sales of similar merchandise.

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Definitions:

Cyclooctane

Cyclooctane is a cyclic hydrocarbon with the molecular formula C8H16, featuring eight carbon atoms connected in a ring.

Organic Solvent

A solvent containing carbon that is used to dissolve other substances; it is an essential part of many chemical processes because it can dissolve many organic compounds.

Molecular Formula

A representation of the numbers and types of atoms present in a molecule, but not its structure.

Cyclopentane

A cyclic alkane with the molecular formula C5H10, characterized by a ring of five carbon atoms, used as a solvent and in the synthesis of rubber.