Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 18 - Revenue Recognition - Review and Practice - Questions - Page 1031: 7

Answer

Contracts are crucial to the revenue recognition process because they call out the performance obligation.

Work Step by Step

For example, when you are contractually obligated to supply bread to a café, you can recognize your revenue after you have delivered the bread as per your contractual obligation.
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