Which of the following is an acceptable revenue-recognition method?
A)At time of shipment, if warranty uncertainty is not reliably measurable.
B)At time of shipment to the consignee, for consignment sales.
C)Installment method, if credit risk is high.
D)At the point of sale, if credit risk is very high.

Question

Quizplus · Accepted Answer

The installment method is an acceptable revenue-recognition method when credit risk is high. This method allows revenue and cost recognition to occur as cash is collected, which is appropriate in scenarios where there's significant uncertainty about the collectability of the receivables.

Which of the Following Is an Acceptable Revenue-Recognition Method