Recognition of Revenue in Accrual Accounting Requires

question 28

Multiple Choice

Recognition of revenue in accrual accounting requires:

• A)that cash be received.
• B)only that the amount of cash to be received from the sale of a product or service be known.
• C)only that a product be delivered or a service be performed.
• D)that the revenue be realized or realizable, and earned.

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Definitions:

Noncontrolling Interest

Represents the equity interest in a portion of a subsidiary's net assets that is not attributable directly or indirectly to the parent company.

Common Stock

A type of equity security that represents ownership in a corporation, with holders usually having a vote in corporate decisions but in the last in line during liquidation.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often receiving dividends before common shareholders and having a fixed dividend rate.

Intra-Entity Transaction

Transactions that occur between two segments within the same company.