The Revenue Recognition Principle

question 157

Multiple Choice

The revenue recognition principle:

• A)Prescribes that accounting information is based on actual cost.
• B)Provides guidance on when a company must recognize revenue.
• C)Prescribes that a company report the details behind financial statements that would impact users' decisions.
• D)Prescribes that a company record the expenses it incurred to generate the revenue reported.
• E)Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

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Definitions:

Union Workers

Employees who are members of a labor union, which represents their interests in negotiations with employers.

Nonunion Workers

Employees who are not members of a labor union and typically do not enjoy the same collective bargaining advantages as unionized workers.

Open Shop

A place of employment in which the employer may hire nonunion workers and in which the workers need not become members of a labor union.

Unionization Rate

The proportion of a workforce that is a member of a union.