When can KOTA Longboards, LLC recognize revenue?
Understand the Problem
The question asks about the appropriate time for KOTA Longboards, LLC to recognize revenue according to accounting principles. It presents four options, each describing a different point in the sales process.
Answer
KOTA Longboards, LLC recognizes revenue when the product is delivered, the price is fixed, and collectibility is reasonably assured.
KOTA Longboards, LLC recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectibility is reasonably assured.
Answer for screen readers
KOTA Longboards, LLC recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectibility is reasonably assured.
More Information
Revenue recognition is a crucial aspect of financial accounting, determining when a company can record revenue in its financial statements.
Tips
A common mistake is recognizing revenue before all the criteria are met, which can lead to inaccurate financial reporting.
Sources
- KOTA Longboards Financial Statements PDF - Quizgecko - quizgecko.com
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