In Selecting the Appropriate Method of Recognizing Revenue, Which of the Following

question 26

Multiple Choice

In selecting the appropriate method of recognizing revenue, which of the following qualitative characteristics of useful accounting information is paramount to the decision?

• A)understandability
• B)decision usefulness
• C)relevance
• D)reliability

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Definitions:

Marginal Social Benefit

The incremental advantage to the community from the consumption or production of an additional unit of a product or service.

Pollution

is the introduction of contaminants into the natural environment that cause adverse changes, affecting air, water, and land quality detrimentally.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit.

Externalities

Economic side effects or consequences of industrial or commercial activity that affect other parties without being reflected in the costs of the goods or services involved.