The Rule That (1)requires Revenue to Be Recognized at the Time

question 40

Multiple Choice

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures the amount of revenue as the cash plus the cash equivalent value of anynoncash assets received from customers in exchange for goods or services is called the:

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

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Definitions:

Service Revenue

Income earned by a company for the services it has provided to its customers.

Bank Loan Payable

Bank Loan Payable is the amount owed by a borrower to a bank, typically represented as a liability on the borrower's balance sheet.