Question

Which of the following is one of the steps for recognizing revenue? Multiple Choice Identify the performance obligations of the contract. Determine whether bad debts can be reasonably estimated. Estimate the total transaction price of the contract based on fair value. Allocate all revenue to the performance obligation with the largest stand-alone selling price.

Answer 1

A) Identify the performance obligations of the contract.

B) Identify the contract with the customer.

C) Estimate the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods and services in the contract.

D) Allocate the transaction price to the performance obligations.

- A performance obligation is a promise to deliver a good or provide a service (or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer).