A Customer Agrees to Pay a Seller Over Time with a Promissory

Multiple Choice

A customer agrees to pay a seller over time with a promissory note. Which of the following statements related to this situation is false?

A) The transaction price is determined by adjusting the promised amount of future consideration to reflect the time value of money.
B) The objective for the adjusting for time value of money is to separate the contract into a revenue element and a financing element.
C) When adjusting for the time value of money, the seller should use the current prime lending rate as the discount rate.
D) Sellers are not required to adjust for the time value of money if the time period between the customer's payment and the company's transfer of goods or services is less than one year.