Sullivan Should Recognize Revenue for the Two Parts of the Arrangement

question 84

Multiple Choice

Sullivan should recognize revenue for the two parts of the arrangement as follows:

• A)Recognize the entire $500 when the customer pays cash to buy the package.
• B)Recognize the portion of the $500 attributable to the software program when the customer pays cash to buy the package, defer the portion attributable to technical support and recognize over the support period.
• C)Defer the entire $500 and recognize over the support period.
• D)None of the other answers is correct

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Definitions:

Inhibits Innovation

Refers to factors or mechanisms that obstruct or slow down the process of creating new ideas, products, or methods.

Public Organizations

Entities that are owned, operated, and funded by the government, serving the public interest and providing services to citizens.

Creativity

The use of imagination or original ideas to create something; inventiveness in thinking or problem-solving.

Commercially Extinct

Refers to a status where a species of fish or other marine population can no longer sustain a commercial fishery, due to overfishing or other environmental factors.