GAAP That Covers Revenue Recognition for Multiple-Element Arrangements Requires That

question 224

Multiple Choice

GAAP that covers revenue recognition for multiple-element arrangements requires that a seller recognize revenue for a particular part if:

• A) The part has value on a stand-alone basis.
• B) Customer acceptance of the part is not contingent on successful delivery of a later part.
• C) The part constitutes at least a "preponderance of the fair value" of the total arrangement.
• D) Both the part has value on stand-alone basis and customer acceptance of the part is not contingent on successful delivery of a later part are required.

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Definitions:

Concessions

Certain compromises or allowances made by a party in a negotiation or discussion to reach an agreement.

Likability

Likability refers to the qualities that make an individual appealing or attractive to others, often contributing to positive interpersonal relationships.

Credibility Factors

Elements that contribute to the believability or trustworthiness of a party in a negotiation, such as their expertise, reputation, and consistency.

Persistent

describes a trait or behavior characterized by continuing firmly or obstinately in an action or belief, often despite difficulty or opposition.