Under GAAP, with Respect to Multiple-Element Arrangements, If the Revenue

question 45

Multiple Choice

Under GAAP, with respect to multiple-element arrangements, if the revenue for a particular part of a multiple-element arrangement does not qualify for separate recognition, it is:

• A) Never recognized.
• B) Recognized when the contract is signed or persuasive evidence of an arrangement exists.
• C) Recognized when revenue for the other parts is recognized.
• D) Recognized at the end of the contract.

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Definitions:

Flexible Budgeting

A budgeting process that allows for adjustments to budgetary allocations based on changes in actual performance, revenue, or other factors.

Sales Budget

A financial plan that estimates the revenues expected from sales over a future period.

Production Budget

An estimate of all costs associated with manufacturing a product for a set period.

Sales Budget

An estimate of the expected total sales revenue and selling expenses of a company for a specific period, helping to plan financial activities.