The Accounting Principle That Requires Revenue to Be Recorded When

question 146

Multiple Choice

The accounting principle that requires revenue to be recorded when earned is the:

• A) Expense recognition (matching) principle.
• B) Going-concern assumption.
• C) Time period assumption.
• D) Accrual reporting principle.
• E) Revenue recognition principle.

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Definitions:

Inventory

Materials and products that a company holds for the ultimate goal of resale or utilization in production.

Perpetual Inventory System

An inventory management system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Automobile Dealership

A business that sells new or used cars at the retail level, based on a dealership contract with an automaker.

Likely Used

Refers to items or methods that are commonly adopted or employed due to their effectiveness or efficiency.