Application of Conditions for Revenue Recognition
Response to the following problem:
Four conditions must be met before revenue should be recognized. In each of the following cases, tell which condition has not been met.
a. Company A accepts a contract to perform services in the future for $2,000.
b. Company B ships products worth $3,000 to another company without an order from the other company but tells the company it can return the products if it does not sell them.
c. Company C performs services for $10,000 for a company that is in financial difficulty.
d. Company D agrees to work out a price later for services that it performs for another company.