What Is the Appropriate Revenue Recognition Procedure for Upfront Payments

question 60

Multiple Choice

What is the appropriate revenue recognition procedure for upfront payments received in a contract with a customer?

• A) capitalize and amortize over the contract term
• B) defer recognition until the end of the contract
• C) recognize immediately
• D) recognize whenever the related performance obligation is satisfied

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Definitions:

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Pre-purchased vouchers or electronic codes that allow the holder to watch a film at a movie theater.

Inferior Good

An Inferior Good is a type of good whose demand decreases as the income of consumers increases, contrasting with normal goods.

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