When a Performance Obligation Is Satisfied,an Entity Shall Recognise Revenue

question 56

Multiple Choice

When a performance obligation is satisfied,an entity shall recognise revenue:

• A) in full if it is an immaterial amount.
• B) when the asset is transferred and the customer gains control of the asset.
• C) when the entity retains control.
• D) when the risks and rewards are transferred to the customer.

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Definitions:

Peripheral Route

A concept in persuasion that refers to the influence of cues that are not directly related to the message content, such as the attractiveness or credibility of the source.

Central Route

A pathway of persuasion that involves thoughtful consideration of the arguments presented, leading to lasting attitude change.

Cognitive Dissonance

A psychological phenomenon involving conflicting attitudes, beliefs, or behaviors that cause mental discomfort leading to an alteration in one of the attitudes, beliefs, or behaviors to reduce the discomfort.

Self-Perception Theory

A theory suggesting that individuals develop their attitudes and feelings by observing their own behavior and concluding what attitudes must have caused them.