Select the Correct Revenue Recognition Principle for Each of the Following

question 135

Multiple Choice

Select the correct revenue recognition principle for each of the following. (Choices may be used more than once.)
-Consulting Services

• A)Recognize revenue over the passage of time.
• B)Recognize revenue when the customer takes possession of the product.
• C)Recognize revenue when cash is collected.
• D)Recognize revenue when service is performed.

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Definitions:

Settle Account

The process of paying off or resolving a financial account or obligation.

Percent of Receivables Method

An accounting technique used to estimate the amount of a company's receivables that will not be collected.

Unadjusted Trial Balance

A financial report that lists all the accounts and their balances from the ledger before any adjusting entries are made, used to verify the equality of debits and credits.

Ending Accounts Receivable

Ending accounts receivable is the amount of money owed to a company by its customers for goods or services delivered but not yet paid for at the end of an accounting period.