Which of the Following Is Not True About Contract Assets

question 284

Multiple Choice

Which of the following is not true about contract assets?

• A) Contract assets are recorded when payment depends on something other than the passage of time.
• B) Contract assets are recognized when the seller has a conditional right to receive payment.
• C) Contract assets are recognized when the seller has been paid in advance for at least partially fulfilling its performance obligations.
• D) Contract assets are not the same as accounts receivable.

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Definitions:

Industry

a sector of the economy characterized by a specific kind of business activity.

Equity Carve-Out

A strategy where a company sells a percentage of an operating unit's stock to outside investors.

IPO

Initial Public Offering, the process by which a private company becomes publicly traded on a stock exchange by offering its shares for sale to the public for the first time.

Subsidiary

A business that is either fully or partially owned and controlled by another entity, referred to as the parent company.