Able Company enters into a contract with a customer to provide them with an accounts receivable program. Able will also provide installation services as part of the contract. The customer is free to enlist the services of another entity to install the software. What is the number of performance obligations for this contract?
A) 0
B) 1
C) 2
D) 3

Question

Quizplus · Accepted Answer

The contract has two performance obligations: providing the accounts receivable program and the installation services. Since the customer can choose another entity for installation, these are distinct services.

Able Company Enters into a Contract with a Customer to Provide