GAAP That Covers Revenue Recognition for Multiple-Element Arrangements Requires That

question 224

Multiple Choice

GAAP that covers revenue recognition for multiple-element arrangements requires that a seller recognize revenue for a particular part if:

• A) The part has value on a stand-alone basis.
• B) Customer acceptance of the part is not contingent on successful delivery of a later part.
• C) The part constitutes at least a "preponderance of the fair value" of the total arrangement.
• D) Both the part has value on stand-alone basis and customer acceptance of the part is not contingent on successful delivery of a later part are required.

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Definitions:

Trade Regulation Rules

Rules established by regulatory authorities to govern the practices of businesses, aimed at ensuring fairness in commerce and preventing anticompetitive behavior.

Consent Order

A legal agreement approved by a court, usually resolving a dispute between parties without admission of guilt or liability.

Cease-And-Desist Order

A legal order issued by a governmental agency or court to halt a particular activity or practice deemed illegal or harmful.

Deceptive Omissions

Misleading practices involving the withholding of important information or details that could influence a consumer's purchasing decision.