Revenue Recognition

CFA Level I
#1

Which of the following statements best describes the appropriate application of revenue recognition principles under U.S. GAAP? a. Under the accrual method, sales revenue and the related cost of sales is recognized ratably over future periods as the cash is collected. b. The installment method is appropriate when uncertainty exists about estimates of the remaining costs to complete the sale. c. The cost recovery method recognizes cash receipts first as a recovery of seller costs; thereafter, subsequent cash receipts are recognized as income. d. If there is any uncertainty about cash collection, the installment method should be used. - Dinesh S

#2

C

#3

going for ‘C’ as well.

#4

C.

#5

c

#6

C

#7

C

#8

C is the correct answer and all of you are correct. I, for my own unknown reasons, selected D :frowning: - Dinesh S