If the Firm Has Received a Promise of Payment but Cannot

question 91

True/False

If the firm has received a promise of payment but cannot measure this promise with reasonable reliability, and U.S.GAAP would permit revenue to be recognized, but IFRS would not permit revenue to be recognized.

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Definitions:

Consumer Surplus

The variance between the sum consumers are willing to pay for a good or service and the amount they truly pay.

Willingness to Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting the value they assign to it.

Consumer Surplus

The gap between the sum consumers are ready and able to spend on a good or service and what they really pay for it.

Normal Goods

Goods for which demand increases as consumer income rises.