Which statement is correct about multiple deliverable sales arrangements?
A)The residual value method must be used.
B)The relative fair value method must be used.
C)There is no specific method that must be used.
D)The relative fair value method increases moral hazard.

Question

Quizplus · Accepted Answer

There is no specific method that must be used for multiple deliverable sales arrangements. However, the method chosen must be able to fairly allocate the revenue to the individual deliverables based on their standalone selling price. The residual value method and the relative fair value method are both acceptable methods, but neither one is required. Option D is not relevant to the topic of multiple deliverable sales arrangements.

Which Statement Is Correct About Multiple Deliverable Sales Arrangements