The method most commonly used to report defaults and

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49. The method most commonly used to report defaults and repossessions is a. provide no basis for the repossessed asset thereby recognizing a loss. b. record the repossessed merchandise at fair value, recording a gain or loss if appropriate. c. record the repossessed merchandise at book value, recording no gain or loss. d. none of these. 50. Under the installment-sales method, S 51. The realization of income on installment sales transactions involves P 52. A manufacturer of large equipment sells on an installment basis to customers with questionable credit ratings. Which of the following methods of revenue recognition is least likely to overstate the amount of gross profit reported? 53. A seller is properly using the cost-recovery method for a sale. Interest will be earned on the future payments. Which of the following statements is not correct? a. After all costs have been recovered, any additional cash collections are included in income. b. Interest revenue may be recognized before all costs have been recovered. c. The deferred gross profit is offset against the related receivable on the balance sheet. d. Subsequent income statements report the gross profit as a separate item of revenue when it is recognized as earned. 18 - 12
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Revenue Recognition
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