When a Long-Term Service Contract Requires Similar Services to Be

question 51

True/False

When a long-term service contract requires similar services to be performed in more than one act, revenue is recognized by the percentage-of-performance method.

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Definitions:

Pay Off

To completely settle a debt or an obligation.

Compounded Quarterly

A method of calculating interest where the interest is added to the principal balance four times a year.

Extinguish

To put an end to something, such as a debt or obligation, by payment or other settlement.

Payment

The act of transferring money or other valuable items in exchange for goods, services, or to fulfill a contractual obligation.