Which of the Following Activities Does Not Violate the Revenue

question 36

Multiple Choice

Which of the following activities does not violate the revenue recognition principle?

• A) Recording cash received in advance from customers as revenue when the product is not yet shipped
• B) Recording cash received in advance from customers as a liability when the product is not yet shipped
• C) Recording revenue in December 2013 for units manufactured but not yet sold to customers
• D) Not recording interest earned in 2013 until the cash is received in 2014

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Definitions:

Purchasing Decision

The process by which a consumer decides what they will buy, taking into account factors like price, quality, and personal preferences.

Aspirational Reference Group

A group that an individual aspires to belong to or identifies with, influencing their behavior and choices.

Reference Groups

Social groups that individuals use as a standard for evaluating their own behavior, attitudes, and values.

Marketers

Professionals involved in identifying customer needs and promoting, selling, and distributing goods or services to meet those needs.