Under which circumstances would the time value of money become a factor that affects the transaction price?The customer pays the seller well in advance of the promised goods or services being transferred.The customer pays the seller well after the promised goods or services are transferred.The customer pays with a 3-year note payable.All of these choices.

Answer: Option 3.Explanation: Time value of money operates on the principle that there is a greater benefit to receiving a certain sum of money now instead of receiving an identical sum on a future date. This implies and sum of money is worth more the sooner it is received. The customer paying a year note payable will affect the transaction price under the concept of the time value of money.

Answered: Under which circumstances would the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Under which circumstances would the time value of money become a factor that affects the transaction price?

The customer pays the seller well in advance of the promised goods or services being transferred.
The customer pays the seller well after the promised goods or services are transferred.
The customer pays with a 3-year note payable.
All of these choices.

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