Under the Direct Method, One of the Adjustments to Revenue

question 117

Multiple Choice

Under the direct method, one of the adjustments to revenue to determine cash receipts from customers is made by

• A)deducting a decrease in accounts receivables.
• B)adding an increase in accounts receivables.
• C)adding a decrease in deferred revenue
• D)deducting a decrease in deferred revenue.

---

Definitions:

Average Rate

In finance, it typically refers to the mean rate of return or interest rate over a specific period. It can also mean the average exchange rate over a period for currency conversion.

Capital Investment

Funds invested in a business with the expectation of future benefits, such as acquiring new equipment, buildings, or other resources to generate income.

Net Present Value

A method used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

Capital Investment

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment to increase operational efficiency.