A Local Ice Cream Shop Pledged 10% of Its Sales

question 28

Multiple Choice

A local ice cream shop pledged 10% of its sales on July 1 to the Children's Clubhouse, a not-for-profit organization. How should the Children's Clubhouse treat this pledge?

• A)Accrue the pledge when it is made
• B)Accrue the pledge only if the amount can be reasonably estimated
• C)Accrue the pledge only if there is reasonable assurance that the ice cream shop will pay
• D)Recognize the pledge when it is collected

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Definitions:

Haier

A global Chinese consumer electronics and home appliances company known for its innovation and quality products.

Maturity Stage

The maturity stage is a phase in the product life cycle characterized by a slowdown in sales growth because the product has achieved acceptance by most potential buyers, leading to increased competition.

Long Production Runs

Extended periods of continuously producing the same product, which often leads to economies of scale and reduced costs per unit.