When a $100 000 Sale of a Yacht Is Made

question 68

Multiple Choice

When a $100 000 sale of a yacht is made by accepting a $10 000 down payment and nine future yearly payments of $10 000 each, profit will most likely be recognised using the:

• A)completed contract method.
• B)instalment method.
• C)percentage of completion method.
• D)none of the above

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Definitions:

Acquisition Transaction

The process by which one company purchases most or all of another company's shares or assets, effectively taking control of the target company.

Common Stock

A type of ownership in a corporation, representing a claim on part of the company's assets and earnings.

Contingent Consideration

An obligation of a buyer to transfer additional assets or equity interests if future events occur or conditions are met after a business combination.