Under long-term performance contracts-such as product warranty contracts and software maintenance contracts-revenues are often collected in advance and are recognized proportionally over the entire period of the contract.

Question

Quizplus · Accepted Answer

This is true, as revenues are recognized proportionally over the entire period of the contract in long-term performance contracts such as product warranty contracts and software maintenance contracts. This is done to match the revenue recognition with the delivery of services over time.

Under Long-Term Performance Contracts-Such as Product Warranty Contracts and Software