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 has an outstanding performance obligation under the contract.

Question

Quizplus · Accepted Answer

Mutually unexecuted contracts do not require recognition of deferred revenues because neither party has performed any part of the contract, so there is no revenue to defer.

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