Under Which of the Following Circumstances Would Revenue Normally Be

question 39

Multiple Choice

Under which of the following circumstances would revenue normally be recognised?

• A) A customer pays an overdue account.
• B) A customer pays for goods in advance of production.
• C) The business makes a cash purchase of merchandise.
• D) The business makes a cash sale of merchandise.

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Definitions:

Transfer Payments

Payments made by governments to individuals or groups without requiring any goods or services in return, such as welfare, social security, and subsidies.

Injections

Funds entering the economy through investment, government spending, and exports that can stimulate economic activity.

Value Added Method

An approach to calculating GDP that sums the values added at each stage of production, reflecting the contribution of labor and capital to the production process.

Double Counting

The error in accounting or estimation when the same item or transaction is counted more than once, leading to inaccuracies in economic measurements.