Revenue Should Be Recognized

question 55

Multiple Choice

Revenue should be recognized

• A) at the end of production.
• B) at the time of cash collection.
• C) when realized.
• D) when the performance obligation is satisfied.

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Definitions:

Joint Cost

The costs incurred in producing products up to a split-off point in a process that yields multiple products, typically allocated among the products based on some reasonable method.

Split-off

A point in the manufacturing process where multiple products are generated from a common input.

Opportunity Cost

The potential benefit lost when choosing one alternative over another.

Excess Capacity

The amount by which current production capabilities exceed the current demand for a company's products or services.