The Accounting Principle Which Tells Accountants When to Record Revenue

question 75

Multiple Choice

The accounting principle which tells accountants when to record revenue and in what amount is called the:

• A) expense recognition principle
• B) going concern principle
• C) revenue recognition principle
• D) cost constraint

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Definitions:

Shut Down

The process of ceasing operations, typically in a business context, either temporarily or permanently.

AVC

Average Variable Cost, which is the total variable costs of production divided by the quantity of output produced.

Average Variable Cost

The variable costs associated with production when divided by the total units manufactured, indicating the cost per unit that varies.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, decreasing as production increases.