Oracle Benefits Cloud 2023 Implementation Essentials — Question 9

When deciding how to set up the system to recognize revenue, it is important to understand the extent of revenue deferral and the subsequent timing of revenue recognition.
Which two statements are true when you consider that recognition depends on the nature of the contingency? (Choose two.)

Answer options

• A. Payment-based contingencies do not always require payment before the contingency can be removed and revenue recognized.
• B. Post-billing customer acceptance clauses must expire (implicit acceptance), or be manually accepted (explicit acceptance), before the contingency can be removed and revenue recognized.
• C. Pre-billing customer acceptance clauses require the recording of customer acceptance in the feeder system, or its expiration, before importing into Receivables for invoicing. Customer acceptance or its expiration must occur before the contingency can be removed and the order can be imported into Receivables for invoicing.
• D. Time-based contingencies can expire, but the contingency will have to be removed manually before the revenue is recognized if payment is not due yet.
• E. Time-based contingencies must not expire before the contingency can be removed and revenue recognized.

Correct answer: A, B

Explanation

Option A is correct because payment-based contingencies can sometimes be lifted without requiring payment first. Option B is also correct as it explains the need for customer acceptance clauses to be resolved before revenue can be recognized. Options C, D, and E are incorrect because they provide conditions that do not align with the nature of revenue recognition regarding acceptance and deferral.