Revenue Is Recognized When

question 54

Multiple Choice

Revenue is recognized when:

• A) it has been earned and is realized or realizable
• B) a company has satisfied its performance obligation to the customer
• C) a seller collects cash from a customer
• D) a company bills the customer for the goods that have been delivered or the services performed.

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Definitions:

Exercise Price

The cost at which an option's holder may purchase (if it's a call option) or sell (if it's a put option) the asset underneath.

Time To Expiration

The remaining period until an option contract or other derivative expires, after which it becomes worthless.

Stock Price

The cost of purchasing a share of a company, determined by the supply and demand in the stock market.

Time Value

The concept in finance that money available now is worth more than the same amount in the future due to its potential earning capacity.