If a company has been in existence for some time, it is sometimes true that income would be higher if it uses the installment method of accounting for sales than if it uses the immediate recognition method.

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The installment method allows for revenue to be recognized over time as payments are received, which can spread out the income and potentially result in higher total income over a longer period of time. The immediate recognition method would recognize all revenue at once, potentially resulting in a year with a large amount of income followed by years with lower amounts of income.

If a Company Has Been in Existence for Some Time