Which of the following does not correctly describe the implications of an executory contract on the accounting entries and/or disclosures to be made by the purchaser and/or seller?
A)Assets and liabilities are usually recorded at inception of the contract.
B)Assets and liabilities are usually not recorded at inception of the contract.
C)Contract details should be disclosed if the amounts are abnormal in relation to the entity's normal business operations.
D)Assets and liabilities are recognized as performance has occurred.

Question

Quizplus · Accepted Answer

Executory contracts typically do not result in the recognition of assets or liabilities at inception because neither party has performed. Recognition occurs as performance takes place.

Which of the Following Does Not Correctly Describe the Implications