U.S.GAAP allows companies to use the cost recovery method for recognizing profits
A)when collections on installment sales occur over an extended period and there is no reasonable basis for estimating collectibility.
B)on any installment sale.
C)only when selling to companies with strong credit ratings.
D)if they are in industries where this is the accepted practice.

Question

Quizplus · Accepted Answer

The cost recovery method is allowed under U.S.GAAP when there is no reasonable basis for estimating collectibility on installment sales occurring over an extended period.

USGAAP Allows Companies to Use the Cost Recovery Method for Recognizing