The installment method of recognizing revenue
A) should be used only in cases in which no reasonable basis exists for estimating the collectibility of receivables.
B) is not a generally accepted accounting principle under any circumstances.
C) should be used for book purposes only if it is used for tax purposes.
D) is an acceptable alternative accounting principle for a firm that makes installment sales.

Question

Quizplus · Accepted Answer

The installment method should be used only when there is no reasonable basis for estimating the collectibility of receivables, as it defers revenue recognition until cash is collected.

The Installment Method of Recognizing Revenue