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:

Per-unit Burden

The financial impact or cost of a tax, fee, or regulation expressed on a per unit basis.

Tax

Compulsory contributions made to government revenues, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

Per-unit Burden

The tax cost to a buyer or a seller for each unit of a good or service, often used to analyze the effect of taxes on market equilibrium.

Tax

A financial charge or other levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.