In the Chart Below, Identify the Revenue Recognition Method That

question 95

Essay

In the chart below, identify the revenue recognition method that you feel is most appropriate and also explain why.
$$\begin{array} { | l | c | l | } \hline \text { Transaction } & \begin{array} { c } \text { Revenue recognition } \\\text { method }\end{array} & \text { Why? } \\\hline \text { A. An appliance store sells and delivers a fridge } & & \\\text { with a two-year warranty. } & & \\\hline \text { B. An airplane manufacturer signs a contract to } & & \\\text { supply two planes over four years for Air } \\\text { Canada. } & & \\\hline \text { C. An insurance company issues a one-year } & & \\\text { insurance policy. } & & \\\hline\end{array}$$

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Definitions:

Production

The process of creating goods and services through the combination of labor, materials, energy, and technology.

Distribution

The process by which goods, services, or resources are spread or allocated across different areas or among various groups.

Exchange

The act of giving one thing and receiving another, particularly goods or services, in return either through barter or monetary purchase.

Work Automation

The use of technology to perform tasks without human intervention, often leading to increased efficiency but also potentially job displacement.