Financial Reporting and Analysis Q73

0. Telecom Ltd. has a four year license to provide communication services to a corporation. The total amount of the license fee that Telecom Ltd. will receive is $50,000. Revenue is recognized on a prorated basis as it is a long term contract. What revenue would Telecom Ltd. recognize at the end of year 1?

  • Option : B
  • Explanation : The revenue recognized will be the total amount divided by the time period. Therefore, 50000/4 = $12,500.
Cancel reply

Your email address will not be published. Required fields are marked *


Cancel reply

Your email address will not be published. Required fields are marked *