Which of the Following Must Exist Prior to the Recognition

question 96

Multiple Choice

Which of the following must exist prior to the recognition of revenue by a company from the sale of a product?

• A) The cash is realized on the sale of the product.
• B) A price is discussed based upon the customer's resale of the product.
• C) The customer is given the option to return the product at any time.
• D) The product is adequately delivered to the customer.

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Definitions:

Implied Authority

Authority of an agent that is not explicitly stated but is implied by the agent's actions or the circumstances of the task.

Terminate

To bring something to an end or conclude its operation.

Agency Relationship

A legal relationship in which one party, the agent, acts on behalf of another party, the principal, with the principal's consent.

Right

A legal, moral, or social entitlement to have or obtain something or to act in a certain way.