When a firm sells products or services that will be delivered over a long period of time, (e.g., two years), and the firm knows the amount of money it will collect at the end of the transaction, the revenue can be recognized in each period according to two potential methods. Which of the following sentences represents the difference between the output and the input method?

• a) In the Input method, revenue is recognized based on the proportion of total costs that has been incurred in the period. On the other side, in the Output method, revenue is recognized according to units produced or milestones achieved.

• b) In the Input method, revenue is recognized based on the proportion of total sales that has been generated in the period. On the other side, in the Output method, revenue is recognized according to total costs incurred through the period.

• c) In the Input method, revenue is recognized based on the units produced in the supply chain through the period. On the other side, in the Output method, revenue is recognized according to the proportion of sales to cash flows generated in the period.