A company that sells multiple deliverables for a single price should normally allocate the revenue among the various deliverables based on the relative selling prices of these deliverables.

Question

Quizplus · Accepted Answer

According to the revenue recognition principle in accounting, companies should allocate revenue based on the relative selling prices of the deliverables in a multiple-element arrangement. This is to ensure that revenue is recognized in proportion to the value of each deliverable.

A Company That Sells Multiple Deliverables for a Single Price