Use the following information for the following questions.: A product and service are bundled together and sold to customers for $ 450. The fair values of the product and service are $ 350 and $ 150 respectively.
-At the time of contract signing,
A) no journal entry is recorded.
B) a contract liability is recorded.
C) a contract asset is recorded.
D) a note to the financial statements must be included.

Question

Use the following information for  the following questions.: A product and service are bundled together and sold to customers for $ 450. The fair values of the product and service are $ 350 and $ 150 respectively.
-At the time of contract signing,
A) no journal entry is recorded.
B) a contract liability is recorded.
C) a contract asset is recorded.
D) a note to the financial statements must be included.

Quizplus · Accepted Answer

At the time of contract signing, no journal entry is recorded because the revenue recognition criteria have not yet been met. Revenue is recognized when the performance obligations are satisfied, not at the time of contract signing.

Use the Following Information for the Following Questions