Franchise Fees Should Be Recognized

question 43

Multiple Choice

Franchise fees should be recognized

• A)on the date the contract was signed.
• B)on the date the franchise is opened for business.
• C)on the date the franchise fee is paid to franchisor.
• D)when performance obligations are satisfied.

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Definitions:

NSF

An acronym for "Non-Sufficient Funds," indicating that a check cannot be processed due to insufficient money in the account.

Bank Reconciliation

The process of comparing and adjusting a company's financial records to match the transactions recorded by the bank, ensuring accuracy in the accounts.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those presented on a bank statement.

Cash Sales

Transactions in which a customer pays for goods or services at the point of sale with cash, resulting in immediate revenue for the seller.