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

Question

Quizplus · Accepted Answer

FASB ASC 606 defines transaction price as "the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties." This means that the transaction price includes all forms of consideration that an entity expects to receive from a customer, including discounts, rebates, and noncash consideration. It also includes the time value of money if the contract involves a significant financing component. Therefore, Choice B is the correct answer.

According to FASB ASC 606, the Transaction Price