Which of the Following Is Not a Proper Application of the Revenue

question 104

Multiple Choice

Which of the following is not a proper application of the revenue recognition principle?

• A)Recording the sale of merchandise on credit as sales revenue.
• B)Recording rent received in advance as unearned rent revenue.
• C)Recording interest revenue when cash is collected rather than when earned.
• D)Reducing the unearned service revenue account for service revenue performed at the end of the accounting period.

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Definitions:

Cost Function

A mathematical formula or equation that describes how production costs change with alterations in the volume of output.

U-shaped Cost Curve

A graphical representation showing that as output increases, average costs initially decrease, reach a minimum, and then increase.

Ambrosia

Often referred to in mythology as the food or drink of the gods, typically signifying something with an exquisite taste or smell.

Red Price

There is no standard definition for this term in economics; it may be used informally to denote a specific pricing strategy or condition but lacks a general meaning.