Sao Paulo Trains Inc, incorporated in Brazil, manufactures high-speed trains. In this industry, the time to manufacture products usually exceeds one year. Assume that Sao Paulo Trains recently signed a €8 billion contract to provide 10 new high-speed trains to a customer in the European Union. The customer has paid a deposit of €500 million and will pay the remainder in equal installments
over the next four years. When should Sao Paulo Trains recognize the revenue from this contract?
a. at the time Sao Paulo Trains signs the contract and receives €500 million cash from the customer
b. assuming that Sao Paulo Trains can reliably estimate both the revenue from the contract and the costs to complete the contract, it will recognize revenue (as well as the costs associated with delivering on the contract) over the contract life.
c. Sao Paulo Trains will recognize all of the revenue (as well as all of the costs associated with delivering on the contract) at the completion of the contract
d. at the time Sao Paulo Trains signs the contract and receives the cash payments from the customer
e. none of the above
B
You might also like to view...
The trait definition of leadership suggests ______.
A. leadership occurs because of who the leader is B. interaction is the key to leadership success C. self-confidence is required for good leadership D. dominance is required for good leadership
Land and a building on the land are purchased for $336,000 . The appraised values of the land and building are $60,000 and $300,000, respectively. The cost allocated to the building should be
a. $28,000. b. $122,000. c. $150,000. d. $280,000.
A licensor might grant a license allowing a trademark to be used as part of a domain name
a. True b. False Indicate whether the statement is true or false
Airbnb, a room-sharing site, offers more rooms than Marriott. Goldman Sachs suggests that the supply of new rooms over the next two years will outpace the previous five even though the growth of American occupancy rates has begun to slow. Which competitive force is involved in this situation?
A. the threat of proprietary products B. the threat of new entrants C. the threat of favorable government policies D. the threat of new buyers