A Company May Not Use the Installment Method of Revenue

question 20

Multiple Choice

A company may not use the installment method of revenue recognition for a sales transaction that

• A) is an installment sale
• B) is not an installment sale
• C) has a legal contract
• D) has a probable likelihood of collectibility

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Definitions:

Destructive

Causing a significant amount of harm or damage either physically, emotionally, or materially.

Interdependence Theory

A theory that explores how interpersonal relationships are maintained based on the costs and rewards involved, emphasizing mutual dependence.

Comparison Level

A standard against which the satisfaction and outcomes of a relationship are judged, based on past experiences and societal norms.

Commitment

The condition of being committed to a purpose, task, or partnership.