Bright Co. contracts with customers for sales of its Product X 2.0. Bright Co. delivers...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Bright Co. contracts with customers for sales of its Product X 2.0. Bright Co. delivers the Product X 2.0 to its customer and provides access to an installation support line Monday through Friday. The customer is responsible for the set-up process, which is relatively simple and takes approximately ten minutes. Calls requesting support for set-up have been minimal historically. Bright Co. estimates it will provide less than one hour of support if a customer does call. Which statement is true?
a. Bright Co. must evaluate both quantitative and qualitative factors to determine if the installation support services are immaterial in the context of the contract.
b. Because one hour is quantitatively insignificant, Bright Co. can conclude that the installation support is immaterial in the context of the contract.
c. The delivery of Product X 2.0 is not a promise evaluated for revenue accounting.
d. Because the customer can receive free installation support, it is a material right.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
