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:

Cannabis Use

The act of consuming cannabis, a psychoactive drug, for recreational or medical purposes.

Phencyclidine (PCP)

A dissociative drug known for its mind-altering effects, which can include feelings of detachment from reality and hallucinations.

Intoxication

A state of diminished mental and physical ability resulting from the consumption of alcohol, drugs, or other psychoactive substances.

Perceptual Experiences

Subjective experiences derived from the process of interpreting sensory input from the environment.