When a $100 000 sale of a yacht is made by accepting a $10 000 down payment and nine future yearly payments of $10 000 each, profit will most likely be recognised using the:
A)completed contract method.
B)instalment method.
C)percentage of completion method.
D)none of the above

Question

Quizplus · Accepted Answer

The instalment method is used when payments are received over time and there is uncertainty about the collection of the full sales price, allowing profit to be recognized as payments are received.

When a $100 000 Sale of a Yacht Is Made