Sullivan Should Recognize Revenue for the Two Parts of the Arrangement

question 93

Multiple Choice

Sullivan should recognize revenue for the two parts of the arrangement as follows:

• A)Recognize the entire $500 when the customer pays cash to buy the package.
• B)Recognize the portion of the $500 attributable to the software program when the customer pays cash to buy the package;defer the portion attributable to technical support and recognize over the support period.
• C)Defer the entire $500 and recognize over the support period.
• D)Recognize the entire $500 upon conclusion of the support period.

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Definitions:

Expectations

Anticipated outcomes or behaviors that are envisioned in a specific context.

Innovative Changes

The introduction of new methods, ideas, or products to improve efficiency or outcomes.

Traditional Strategy

A method of planning and executing operations that relies on proven practices and historical success.

Credit for Success

Recognition or acknowledgment given to individuals or groups for their contributions to achieving successful outcomes.