In which of these cases would the criteria for recognising revenue definitely not be met?
A)A wholly executory contract
B)A credit sale
C)The signing of a lease
D)The collection of instalments on a higher purchase contract.

Question

Quizplus · Accepted Answer

A wholly executory contract means that no services or goods have been delivered, and therefore revenue recognition criteria are not met.

Answer: C 
 The signing of a lease does not imply that any goods or services have been delivered, and therefore revenue recognition criteria are not met.

Note: B and D are more ambiguous as it depends on specific terms and conditions of the credit sale and higher purchase contract. Revenue recognition criteria may or may not be met in these cases.

In Which of These Cases Would the Criteria for Recognising