When Is Revenue Generally Recognized

question 15

Multiple Choice

When is revenue generally recognized?

• A) When cash is received.
• B) When the warranty expires.
• C) When production is completed.
• D) When the company satisfies the performance obligation.

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Definitions:

Job-Order Costing

An accounting methodology used to assign costs to specific jobs or batches, enabling the calculation of profitability per job.

Machine-Hours

A measure of production time, calculated by multiplying the number of machines by the hours they are in operation.

Predetermined Overhead Rate

The rate calculated prior to the accounting period that is used to apply overhead costs to products or job orders, based on estimated costs and activity levels.

Machine-Hours

A measure of production time or activity, where one machine-hour represents the operation of a machine for one hour.