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Answer: An immediate right to receive payment for the asset.
**Explanation:** - **Option A (Incorrect):** Legal ownership of the asset by the customer, not the seller, is a factor indicating control transfer. The seller recognizes revenue when control is transferred, not when legal title is held by the seller. - **Option B (Correct):** The seller recognizes revenue when they satisfy the performance obligation by transferring control to the customer. A key indicator of control transfer is the seller's present right to payment, as it signifies the buyer's acceptance of the asset. - **Option C (Incorrect):** The significant risks and rewards of ownership must be transferred to the customer, not retained by the seller, for control to be considered transferred. This option incorrectly attributes this factor to the seller. This question aligns with the **Financial Statement Analysis** topic, focusing on revenue recognition principles and their implications for financial analysis.
Author: LeetQuiz Editorial Team
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Under the converged standards for revenue recognition, which of the following indicates that a seller has transferred control of an asset to a buyer at a specific point in time? The seller has:
A
Legal ownership of the asset.
B
An immediate right to receive payment for the asset.
C
Transferred the significant risks and rewards associated with the asset.
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