The Basic Revenue Recognition Criteria, Under GAAP, Are That Revenue

question 39

Multiple Choice

The basic revenue recognition criteria, under GAAP, are that revenue should not be recognized until:

• A) Services have been delivered, and cash has been received
• B) Services have been agreed upon, and a price has been agreed upon, even if the services have not yet been delivered
• C) An earnings process has been completed, and the revenue is either realized or realizable
• D) Cash has been received, and services have been agreed upon, even if not delivered

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Definitions:

Fund Complexes

Groups or families of mutual funds offered by the same investment company, often sharing the same investment advisor or management team.

Taxable Event

A financial transaction that may result in taxes owing to the government.

Short-term Capital Gain

A profit realized from the sale of an asset held for less than a year, often taxed at a different rate than long-term capital gains.

Long-term Capital Gain

Profit from the sale of an asset held for more than a year, typically subject to a lower tax rate.