According to FASB ASC 606, the Transaction Price

question 37

Multiple Choice

According to FASB ASC 606, the transaction price

• A) Excludes discounts, volume rebates, coupons and free products, or services
• B) Is the amount of consideration that a company expects to receive from a customer
• C) Excludes time value of money if the contract involves a significant financing component
• D) Does not consider noncash consideration such as donations, gifts, equipment or labor

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Definitions:

Liabilities

Financial obligations or debts owed by a business or individual to creditors, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Accounting Equation

The fundamental equation of double-entry bookkeeping that states assets equal liabilities plus equity, serving as the foundation for a balance sheet.

Owner's Equity

The total value of assets owned by the proprietor of a company after all debts have been subtracted.