The deposit method of revenue recognition is used when
A) the product can be marketed at quoted prices and units are interchangeable.
B) cash is received before the sales transaction is complete.
C) the contract is short-term or the percentage-of-completion method can't be used.
D) there are no significant costs of distribution.

Question

Quizplus · Accepted Answer

The deposit method of revenue recognition is used when cash is received before the sales transaction is complete. This method is typically used when a customer makes a deposit or pre-payment for a product or service, and revenue is recognized at the time of the deposit.

The Deposit Method of Revenue Recognition Is Used When