If a Contract Involves a Significant Financing Component

question 68

Multiple Choice

If a contract involves a significant financing component,

• A)the time value of money is used to determine the fair value of the transaction.
• B)the time value of money is not required to determine transaction price, if the payment is more than a year.
• C)the transaction amount should be based on the current sales price of goods or services.
• D)interest is not accrued as a result of the financing component.

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Definitions:

T-Test

An analysis technique designed to evaluate whether the mean values of two distinct groups differ significantly.

Linearly Related

Describes a relationship between two variables where a change in one variable is associated with a proportional change in the other.

Coefficient Of Determination

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.

Covariance

An indicator showing the degree to which two variables fluctuate in unison.