Theoretically, for Revenue to Be Recognized the Risks and Benefits

question 53

Multiple Choice

Theoretically, for revenue to be recognized the risks and benefits of ownership must have been transferred to the buyer.This refers to

• A)expected cash flows being recognized
• B)benefits being the expected net cash flows and the risks being the likelihood of another amount of cash being received
• C)benefits being properly recorded revenue and the risks being the likelihood of expenses being greater than expected
• D)expected revenue being realized

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Definitions:

Productivity Factor

An indicator of the efficiency with which inputs are converted into outputs in the production process.

Production Technique

The methods and processes used by businesses to manufacture goods or provide services.

Short-run Cost Function

A representation of the total cost associated with production, considering some inputs are fixed.

Average Total Cost

The total cost of production divided by the number of units produced, including both fixed and variable costs.