To determine if a performance obligation exists,
A) the company must provide a distinct product or service.
B) a customer must be able to benefit from the product or service.
C) Both A and B are correct.
D) none of the above

Question

Quizplus · Accepted Answer

Both A and B are correct. A performance obligation exists when a company promises to transfer a distinct good or service to a customer and the customer can benefit from that good or service. Therefore, both A and B must be present for a performance obligation to exist.

To Determine If a Performance Obligation Exists