Question

Which of the following are used to alter the amount of revenue that is recognized? Check all that apply.

a. Change in accounting methods
b. Sales return provisions
c. Extended payment terms
d. Accrual adjustments

Answer 1

Change in accounting methods and accrual adjustments are used to alter the amount of revenue that is recognized.

Step-by-step explanation:

The correct options for altering the amount of revenue recognized are:

• Change in accounting methods: Whenever a company changes its accounting methods, it can impact how revenue is recognized. For example, switching from the cash basis to the accrual basis of accounting can change when revenue is recorded.
• Accrual adjustments: Adjusting entries made at the end of an accounting period, such as recognizing revenue that has been earned but not yet received.