In Applying the Revenue Principle to a Given Transaction, the Most

question 35

Multiple Choice

In applying the revenue principle to a given transaction, the most important moment or period in time is when which of the following happens?

• A) Related cash inflows occur.
• B) Related expenses are incurred.
• C) Sales transaction is completed (i.e., ownership passes) or services are rendered.
• D) The service contract is signed regarding service to be performed.

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Definitions:

Jurisdiction

The legal authority granted to a court or legal body to administer justice within a certain geographic area or over certain types of legal cases.

Security Interest

A legal claim or lien on property, either personal or real, granted to a creditor to secure payment of a debt or performance of some other obligation.

Security Instrument

A legal document that secures the payment of a debt or performance of an obligation by granting an interest in a piece of property.

Registration

The act of recording or enrolling an entity's details officially with an organization or authority, often to grant it certain rights or privileges.