In situations where a company can not estimate the probability of collection, revenue would be recognized under the:
A)percentage completion method
B)the contract signing method
C)instalment method
D)completed contract method

Question

Quizplus · Accepted Answer

The instalment method is used when the probability of collection cannot be estimated. Under this method, revenue is recognized as cash is collected from the customer. This method ensures that revenue is recognized only when actual cash is received, reducing the possibility of overestimating revenue.

In Situations Where a Company Can Not Estimate the Probability