Revenue Is Properly Recognized

question 161

Multiple Choice

Revenue is properly recognized:

• A)When the customer's order is received.
• B)Only if the transaction creates an account receivable.
• C)At the end of the accounting period.
• D)Upon completion of the sale or when services have been performed and the business obtains the right to collect the sale price.
• E)When cash from a sale is received.

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Definitions:

Value Barrier

An obstacle that prevents a customer from recognizing or accepting the value in a product or service.

Usage Barrier

Obstacles that prevent or discourage customers from using a product or service, which can include lack of awareness, accessibility issues, or complexity.

Product Trial

An opportunity for customers to try a product before making a purchase decision, often used as a marketing strategy.

Free Samples

Small portions or trial versions of a product given away free of charge to promote and encourage the trial or purchase of the product.