The Revenue Principle States That Revenue Should Be Recognized at a Point

question 33

Multiple Choice

The revenue principle states that revenue should be recognized at a point when

• A) an exchange transaction involving goods and services has occurred and the earnings process is essentially complete.
• B) an order for shipment of a definite amount of merchandise has been received.
• C) a contract between buyer and seller has been signed by both parties.
• D) the seller has shipped merchandise to a customer under the terms that the customer need not pay for the merchandise until it is sold.

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Definitions:

Stomach Lining

The inner layer of the stomach, consisting of mucus membranes that protect it from acidic digestive juices.

Gastritis

Inflammation of the stomach lining.

Inflamed

A response of body tissues to injury or to the disruption of tissues, often characterized by redness, heat, swelling, pain, and sometimes loss of function.

Digestive System

A group of organs working together to convert food into energy and basic nutrients to feed the entire body.