Which of the Following Transactions Should Not Result in Revenue

question 9

Multiple Choice

Which of the following transactions should not result in revenue recognition in 2018?

• A) Services for a customer were carried out on credit in 2018, to be collected in 2019.
• B) Services were carried out for a customer for cash in 2018.
• C) Payment was received from a customer in 2018, for services provided in 2017.
• D) Goods were sold to a customer on credit in 2018, with cash to be collected in 2019.

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of a specific accounting period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes associated with maintaining the business operations.