Which of the Following Types of Service Transactions Is Most

question 14

Multiple Choice

Which of the following types of service transactions is most likely to require the proportional performance method of revenue recognition based on the seller's direct costs to perform each act?

• A) Processing of monthly mortgage payments by a mortgage banker
• B) Providing lessons,examinations,and grading by a correspondence school
• C) Providing maintenance services on equipment for a fixed periodic fee
• D) Delivering freight (by a trucking firm)

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Definitions:

Order Instrument

A financial document that is payable to a specific person or entity, distinguishing it from bearer instruments which are payable to whoever holds the document.

Bearer Instrument

A type of financial security that is payable to the holder or presenter of the document.

Endorsement

An amendment or addition to an existing document or policy, especially in the context of insurance, or it can also mean the act of publicly supporting a product, service, or person.

Transferable

Characteristic of an asset or right that allows it to be passed from one party to another, often through sale or trade.