Revenue Should Be Recognized Over Time for the Construction of an Annex

question 233

True/False

Revenue should be recognized over time for the construction of an annex to a building that the customer owns, even if the seller will not receive payment until the annex is completed.

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Definitions:

Received Utility Bill

An invoice received for the consumption of utility services such as electricity, water, or gas.

Increase Liabilities

This occurs when a company incurs more debts or obligations, leading to an uptick in the claims against its assets.

Borrowed Money

Funds that have been obtained through loans that are expected to be repaid with interest.

Increase Liabilities

The action or process resulting in a rise in the total amount of obligations or debts owed by a business.