Which of the Following Is Not a Step in the Recognition

question 20

Multiple Choice

Which of the following is not a step in the recognition of revenue?

• A) Recognise revenue when the entity satisfies a performance obligation.
• B) Allocate the buying price to the goods or services.
• C) Identify the performance obligation.
• D) Determine the transaction price.

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Definitions:

Owner's Equity

This financial term represents the owner’s interest in the assets of a business, calculated as the difference between the business assets and its liabilities.

Net Margin

A profitability ratio calculated as net income divided by revenue, indicating the percentage of each dollar of revenue that results in net profit.

Inventory Turnover

A measure of how often a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Cycle Times

The total time from the beginning to the end of a process, procedure, or activity, often used as a measure of efficiency in manufacturing and project management.