Why Was Apple Required to Spread Their IPhone Revenues Over

question 223

Multiple Choice

Why was Apple required to spread their iPhone revenues over a two-year period?

• A)Because of its newness, their returns might exceed the normal level of returns.
• B)Because they were required to provide software updates over that two year period.
• C)Because that was the estimated life of the iPhone.
• D)Because they needed to defer revenue recognition since they had a swap program available for future models.

---

Definitions:

Production Run

A period during which a particular batch of goods is manufactured.

Order Costs

Expenses associated with placing and processing orders for products or services.

Inventory Management

The supervision of non-capitalized assets and stock items, including the management of ordering, storing, and using a company's inventory.

ABC Approach

A methodology used in inventory management and cost accounting that prioritizes items based on their importance, cost, or another criterion, often categorized into A, B, and C groups.