On December 15 of the Current Year,Conrad Accounting Services Signed

question 134

Multiple Choice

On December 15 of the current year,Conrad Accounting Services signed a $40,000 contract with a client to provide bookkeeping services to the client in the following year.Which accounting principle would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not the year the cash was received?

• A)Monetary unit assumption.
• B)Going-concern assumption.
• C)Cost principle.
• D)Business entity assumption.
• E)Revenue recognition principle.

---

Definitions:

Marginal Product

The additional output that results from using one more unit of a particular input, holding other inputs constant.

Average Product

The average output produced per unit of a factor of production over a specific period, often calculated for labor or capital.

Input

The resources used in the production process, such as labor, materials, and machinery.

Explicit Costs

These are direct payments made to others in the course of running a business, such as wages, rent, and materials.