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28 January, 14:00

The revenue recognition principle requires companies to follow which of these steps in recording revenue (check all that apply) : A. Allocate the transaction price to the performance obligations B. Identify the contract with the customer C. Identify the performance obligations in the contract D. Determine the transaction price

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  1. 28 January, 14:12
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    A. Allocate the transaction price to the performance obligations

    B. Identify the contract with the customer

    C. Identify the performance obligations in the contract

    D. Determine the transaction price

    Explanation:

    On May 28, 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) jointly issued Accounting Standards Codification (ASC) 606, regarding revenue from contracts with customers. ASC 606 provides a uniform framework for recognizing revenue from contracts with customers.

    Identify the contract

    Identify the contractual performance obligations

    Determine the amount of consideration/price for the transaction

    Allocate the determined amount of consideration/price to the contractual obligations

    Recognize revenue when or as the performing party satisfies performance obligations
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