When Is Revenue Generally Recognized

question 15

Multiple Choice

When is revenue generally recognized?

• A) When cash is received.
• B) When the warranty expires.
• C) When production is completed.
• D) When the company satisfies the performance obligation.

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Definitions:

Standard Form Contract

A pre-prepared contract where most terms are set in advance with little or no negotiation between the parties, often used in routine transactions.

Legal Relationship

A connection between entities or individuals that is recognized and enforceable by law.

Radio

A radio is a technology that uses radio waves to transmit information, such as sound, by systematically modulating properties of electromagnetic energy waves transmitted through space.

Contract Formation

The process of creating a legally binding agreement, typically involving offer, acceptance, consideration, and mutual consent among parties.