Bailey Consulting,a Winnipeg based company that uses the contract-based approach to revenue recognition,has just signed a contract to complete a strategic plan for a local business.The five-step model Bailey Consulting should follow to recognize revenue should include all of the following,except for A)Allocate the transaction price to performance obligations B)Sign the contract C)Identify the performance obligations D)Determine the transaction price

Question

Quizplus · Accepted Answer

The five-step model for revenue recognition includes: 
1) Identify the contract with the customer 
2) Identify the performance obligations in the contract 
3) Determine the transaction price 
4) Allocate the transaction price to performance obligations 
5) Recognize revenue when (or as) the entity satisfies a performance obligation. Therefore, signing the contract is not one of the five steps in revenue recognition.

Bailey Consulting,a Winnipeg Based Company That Uses the Contract-Based Approach