All of the following situations contribute to the need for a company to recognize deferred revenues, except for:
A)Partially executed contracts between buyers and sellers
B)The requirement by sellers for the prepayment of goods and services
C)Mutually unexecuted contracts between buyers and sellers
D)The seller has collected a deposit but not yet met the criteria for revenue recognition

Question

Quizplus · Accepted Answer

Mutually unexecuted contracts do not contribute to the need for a company to recognize deferred revenues because there is no contract revenue to recognize until the contract is executed. A, B, and D are situations where a company has received payment for goods or services but has not yet recognized revenue because the criteria for revenue recognition have not been met.

All of the Following Situations Contribute to the Need for a Company