Under ASC 606, which option best describes a performance obligation?

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Multiple Choice

Under ASC 606, which option best describes a performance obligation?

Explanation:
Under ASC 606, a performance obligation is a promise in the contract to transfer a good or service to the customer. It becomes the unit of accounting for revenue and is satisfied when the customer gains control of the promised good or service, either at a point in time or over time. The contract price is just the consideration for fulfilling obligations, not the obligation itself; payment method is how the price is settled; and a delivery date alone indicates timing, not the promise to transfer.

Under ASC 606, a performance obligation is a promise in the contract to transfer a good or service to the customer. It becomes the unit of accounting for revenue and is satisfied when the customer gains control of the promised good or service, either at a point in time or over time. The contract price is just the consideration for fulfilling obligations, not the obligation itself; payment method is how the price is settled; and a delivery date alone indicates timing, not the promise to transfer.

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