Nonrefundable Upfront Fees

question 20

Multiple Choice

Nonrefundable upfront fees

• A)should be recognized immediately upon receipt of payment.
• B)such as activation fees for cable should be recognized as revenue immediately.
• C)such as a one-time initiation fee in a health club should be recognized immediately.
• D)should not be recorded as revenue at the time of payment if they are for future delivery of products and services.

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Definitions:

Closing Stock Price

The final price at which a stock is traded on a given trading day.

75th Percentile

A value below which 75% of the data points in a distribution fall, also known as the third quartile.

sample Data

Collected portions of data from a population used to infer or estimate characteristics of the entire population.

Covariance

A measure of how much two random variables change together.