Why Do Generally Accepted Accounting Principles Require the Application of the Revenue

question 70

Multiple Choice

Why do generally accepted accounting principles require the application of the revenue recognition principle?

• A)Failure to apply the revenue recognition principle could lead to a misstatement of revenue.
• B)It is easy to apply the revenue recognition principle because revenue issues are always easy to identify and resolve.
• C)Recording revenue when cash is received is an objective application of the revenue recognition principle.
• D)Accounting software has made the revenue recognition easy to apply.

---

Definitions:

Investment Policy Statement

A document that outlines an individual's or entity's investment objectives and strategies.

Relevant Constraints

Factors or limitations that affect the choices available to a business or individual when making decisions.

Investment Guidelines

Rules or criteria laid out by an investor or fund manager to guide the selection and management of investments.

Money Market Accounts

Financial accounts that typically offer higher interest rates compared to savings accounts, often used for short-term financial needs.