A Conditional Pledge Should Be Recognized as Revenue When the Pledge

question 134

True/False

A conditional pledge should be recognized as revenue when the pledge is made.

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Definitions:

Incremental Costs

Costs that change depending on the level of production or an alternative course of action.

Additional Revenues

Extra income generated from sources outside of the company's main business operations.

Sunk Cost

Costs that have already been incurred and cannot be recovered or reversed.

Incremental Overhead Costs

Additional overhead expenses directly resulting from a specific business decision or activity.