Which of the Following Activities Does Not Violate the Revenue

question 1

Multiple Choice

Which of the following activities does not violate the revenue recognition principle?

• A) Recording revenue in December 2013 for units manufactured but not yet sold to customers
• B) Recording cash received in advance from customers as revenue when the product is not yet shipped
• C) Not recording interest earned in 2013 until the cash is received in 2014
• D) Recording cash received in advance from customers as a liability when the product is not yet shipped

---

Definitions:

Contestable Market Model

A theory suggesting that a market with free entry and exit can be competitive even if there are few firms, due to potential competition.

Greatest Efficiency

Greatest Efficiency is achieved when a system or process produces the maximum output with the least amount of wasted resources.

Dominant Strategy

In game theory, a strategy that is best for a player regardless of the strategies chosen by other players.

Advertise

The action or business of promoting and selling products or services, including market research and advertising.