A franchiser is permitted to recognize the revenue from the sale of a franchise whenever they wish under accrual-basis accounting.

Question

Quizplus · Accepted Answer

This statement is false. The franchiser must recognize the revenue from the sale of a franchise under accrual-basis accounting when it is earned, which is typically when the franchise has been fully established and the franchiser has fulfilled all obligations outlined in the franchise agreement.

A Franchiser Is Permitted to Recognize the Revenue from the Sale