The Question of When Revenue Should Be Recognized on the Income

question 152

Multiple Choice

The question of when revenue should be recognized on the income statement (according to GAAP) is answered by the

• A) revenue recognition principle
• B) going concern principle
• C) currency principle
• D) business entity principle
• E) historical cost principle

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Definitions:

Holder-of-record Date

The specified date set by a corporation by which one must be registered as a shareholder to be entitled to receive dividends or participate in certain corporate events.

Stock Rights

Opportunities given to existing shareholders to purchase additional shares of the company's stock, typically at a discount, before the stock is offered to the public.

Date of Record

The date set by a company on which the shareholders must be registered to be eligible for dividends or other benefits.

Penny Stocks

Refers to shares of small companies traded at very low prices, often considered highly speculative.