Which of the following items creates complications related to revenue recognition?
A) Bonuses tied to sales goals
B) Long-term construction contracts
C) Multiple element sales contracts
D) Consignment goods
E) All of the above

Question

Quizplus · Accepted Answer

All of the options listed create complications related to revenue recognition. Bonuses tied to sales goals can affect when revenue is recognized, long-term construction contracts often involve recognizing revenue over time and require estimates of progress towards completion, multiple element sales contracts involve allocating the transaction price to different performance obligations, and consignment goods involve recognizing revenue when control of the goods has been transferred, which can be complex to determine.

Which of the Following Items Creates Complications Related to Revenue