Under the Cost-Recovery Method, a Company Recognizes No Revenue Until

question 145

True/False

Under the cost-recovery method, a company recognizes no revenue until cash payments by the buyer exceed the cost of the merchandise sold.

---

Definitions:

Fixed Expense

Costs that remain unchanged over a specified period despite variations in business activity levels, such as lease payments or salaries for permanent staff.

Break-even

The point at which total costs and total revenues are equal, meaning no profit or loss is incurred.

Break-even Point

The point where total costs and total revenues are the same, leading to neither profit nor loss in sales or production levels.

Sales Dollars

The overall income earned from the sales of products or services, measured in currency.