Question
A customer agrees to pay a seller over time with a promissory note. Which of the following statements is false? a. The transaction price is
A customer agrees to pay a seller over time with a promissory note. Which of the following statements is false?
a. The transaction price is determined by adjusting the promised amount of future consideration to reflect the time value of money
b. The objective for adjusting the time value of money is to separate the contract into revenue element and a financing element
c. When adjusting for time value of money, the seller should use the current prime lending rate as the discount rate.
d. Sellers are not required to adjust for the value of money if the time period between the customer's payment and the company's transfer of goods or services is less than one year.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started