Chapter 18, Problem 2E

To determine

Revenue recognition: Revenue recognition is an accounting principle that decides the process of determining and accounting for revenue. Revenue on any transaction is recognized on the performance of the obligation.

Contract: It is a voluntary arrangement that is enforced by the law between two or more parties as a legal binding agreement.

Performance obligation: A promise to transfer goods or services is defined as performance obligation.

Collectability: Collectability refers to the customer’s credit risk meaning that the customer will be unable to get the amount of consideration according to contract.

To determine the answers to the four statements presented in the question document.

Given information: All the related information is provided in the question document.