When a sufficient transfer of the risks and benefits of ownership does not exist in a sales transaction, the preferred revenue recognition method is the
A) proportional performance method
B) installment method
C) percentage of completion
D) deferral method

Question

Quizplus · Accepted Answer

The deferral method is the most appropriate in situations where sufficient transfer of risks and benefits of ownership does not occur in a sales transaction, as revenue recognition is deferred until the transfer occurs. The other methods may not be appropriate in such cases.

When a Sufficient Transfer of the Risks and Benefits of Ownership