The transaction price
A) includes only cash and cash equivalents and does not include non-cash consideration.
B) excludes discounts, coupons, rebates, penalties, or nonrefundable fees.
C) is the amount of consideration a company expects to receive from a customer.
D) must be clearly specified by the contract for each separate performance obligation.

Question

Quizplus · Accepted Answer

The transaction price is defined as the amount of consideration (i.e., payment) a company expects to be entitled to in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (e.g., sales tax). This includes not just cash and cash equivalents but also non-cash consideration and considers the impact of discounts, rebates, and other variable considerations.

The Transaction Price