The new ASC Topic 606 for revenue recognition: Multiple Choice addresses when an

Question

The new ASC Topic 606 for revenue recognition:

Multiple Choice

addresses when and how revenue should be recognized in contracts that provide both goods and services to customers.

eliminates both the percentage-of-completion method and the installment sales method of revenue recognition.

will require companies to recognize a net liability contract position on all new contracts; revenue will then arise from increases in the net contract position over the life of the contract.

is more rules based than are existing standards.

Explanation / Answer

correct option is "A" -addresses when and how revenue should be recognized in contracts that provide both goods and services to customers.

The idea behind this principle is to when an entity should recognise revenue in relation to sale of goods or services for a consideration that an entity reasonably expects to recover.

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