A Rationale for Recognizing Revenue Over the Life of a Contract

question 150

Multiple Choice

A rationale for recognizing revenue over the life of a contract rather than at a single point in time is that:

• A) Results are more conservative.
• B) It provides a better measure of periodic accomplishment.
• C) It is a better match with legal ownership.
• D) It results in a lower income tax.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life to date.

Unearned Revenue

Income received by a company for goods or services that have not yet been delivered or performed.

Roofing Fees Revenue

This refers to the income generated from providing roofing services.