Under Accrual Accounting,the Event That Triggers Revenue Recognition for the Sale

question 153

Multiple Choice

Under accrual accounting,the event that triggers revenue recognition for the sale of goods is the:

• A)date a contract is signed.
• B)date the customer pays for the goods.
• C)date the customer orders the goods.
• D)delivery of goods to customer.

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Definitions:

Artificially High Amounts

Figures or values that have been inflated through accounting practices or activities that do not reflect the true economic value or performance.

Consolidated Financial Statements

Financial statements that aggregate the financial information of a parent company and its subsidiaries, presenting it as if the group were a single entity.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from the total revenue generated from sales.

Voting Stock

Shares that give the shareholder the right to vote on company matters, such as electing directors or approving corporate policies.