Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Using Your Judgment - Financial Statement Analysis Case - Page 72: b

b.Walmart complied with the revenue recognition policy when dealing with layaway sales. Since the sales accounted for partially paid amounts, they indicated a performance of obligation on the part of the buyers. The partial payments make up a long-term contract when, once they have been made, they assure Wal-Mart that it will get the remaining amount. In that context, partial payments were evidence of performance obligation, necessitating the recognition of income from layaway sales.

b.Walmart complied with the revenue recognition policy when dealing with layaway sales. Since the sales accounted for partially paid amounts, they indicated a performance of obligation on the part of the buyers. The partial payments make up a long-term contract when, once they have been made, they assure Wal-Mart that it will get the remaining amount. In that context, partial payments were evidence of performance obligation, necessitating the recognition of income from layaway sales.