The installment-sales method of recognizing profit for accounting purposes is acceptable if
A) collections in the year of sale do not exceed 30% of the total sales price.
B) an unrealized profit account is credited.
C) collection of the sales price is not reasonably assured.
D) the method is consistently used for all sales of similar merchandise.

Question

Quizplus · Accepted Answer

The installment-sales method is used when the collection of the sales price is not reasonably assured, allowing revenue to be recognized as cash is collected.

The Installment-Sales Method of Recognizing Profit for Accounting Purposes Is