Complete Electronics Company Sells a Point-Of-Sale Computer with a Two-Year

question 95

Multiple Choice

Complete Electronics Company sells a point-of-sale computer with a two-year service contract.Complete collects $2,000 cash for the selling price of the computer and $504 for the two-year service contract.How is revenue recognized?

• A) Complete will record Sales Revenue of $2,504 when the computer is delivered to the customer.
• B) Complete will record Sales Revenue of $1,252 per year for two years.
• C) Complete will record Sales Revenue of $2,000 when the computer is delivered and Service Revenue of $21 per month for 24 months.
• D) Complete will record Sales Revenue of $2,000 when the computer is delivered and will record revenue for the service contract as service calls are made.

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Definitions:

Stability

The quality of being resistant to change and capable of maintaining a consistent state over time.

Extraversion

A personality trait characterized by outgoing, sociable, and energetic behavior.

Reciprocal Determinism

A concept in psychology proposed by Albert Bandura that suggests individual behavior and the environment mutually influence each other.

Trait Theory

A theory in psychology that posits personality is composed of a number of broad traits, or characteristic ways of behaving.