Question

Which of the following is not a criterion pertaining to revenue recognition for the sale of...

Which of the following is not a criterion pertaining to revenue recognition for the sale of goods under the earnings approach?

Amount of returns is known with certainty.

Collection is reasonably assured.

Amount of the revenue can be reliably measured.

Significant risks and rewards of ownership have been transferred to the buyer.

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Answer #1

The criteria pertaining to revenue recognition for the sale of goods under the earnings approach are:

1. Significant risks and rewards of ownership have been transferred to the buyer.

2. Seller no longer have control over the goods sold.

3. Collection is reasonably assured.

4. Amount of the revenue can be reliably measured.

5. Cost of the revenue can be reliameasured.

Amount of returns is known with certainty is not a criterion pertaining to revenue recognition for the sale of goods under the earnings approach.

Answer is "Amount of returns is known with certainty."

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