A company providing maintenance services on equipment for a fixed periodic fee would recognize
A) an equal amount of service revenue for each act.
B) service revenue over the fixed period by the straight-line method.
C) service revenue in proportion to the direct costs to the provider of the services to perform each act.
D) service revenue only when the fixed period has ended.

Question

Quizplus · Accepted Answer

Since the maintenance services are provided on a fixed periodic fee, it is appropriate to recognize the service revenue over the fixed period using the straight-line method. This means that the revenue is recognized evenly over the period of the contract, rather than only when each act of service is performed.

A Company Providing Maintenance Services on Equipment for a Fixed