medium · Financial Accounting revenue-recognition

In a principal vs. agent determination, which of the following is the strongest indicator that an entity is a principal?

1. The entity's consideration is structured only as a fixed commission earned per transaction processed.
2. The entity does not take legal title to the underlying goods at any point during the entire transaction process.
3. The entity is primarily responsible for fulfilling the promise to provide the specified good or service.
4. The entity simply lacks any real, meaningful ability to set the price for the good or service.

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