The Installment Method of Recognizing Revenue

question 47

Multiple Choice

The installment method of recognizing revenue

• A) should be used only in cases in which no reasonable basis exists for estimating the collectibility of receivables.
• B) is not a generally accepted accounting principle under any circumstances.
• C) should be used for book purposes only if it is used for tax purposes.
• D) is an acceptable alternative accounting principle for a firm that makes installment sales.

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Definitions:

Synovial Cavity

A fluid-filled space that exists between bones that are encapsulated by a synovial membrane, aiding in smooth movement of the joints.

Articular Surfaces

The surfaces of bones that come into contact with one another to form joints, often covered with cartilage to reduce friction.

Sesamoid Bone

A small, round bone embedded within a tendon; its primary function is to protect tendons and increase their mechanical advantage.

Shoulder

The region where the arm joins the torso, consisting of several joints and an ensemble of muscles and tendons that provide motion and stability.