All of the Following Conditions Signal That Revenue Recognition May

question 68

Multiple Choice

All of the following conditions signal that revenue recognition may have been recorded too early except:

• A) large and volatile amounts of uncollectible accounts receivable.
• B) a decrease in the number of days accounts receivable are outstanding.
• C) unusually large amounts of returned goods.
• D) excessive warranty expenditures.

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Definitions:

Concurrent Validity

A measure of how well a particular test predicts outcomes based on comparison with other measures that are administered at the same time.

Face Validity

The extent to which a test appears to measure what it is supposed to measure, based on an informal and subjective evaluation.

Content Validity

The extent to which a test measures all aspects of the concept it intends to assess.

Construct Validity

The extent to which a test measures what it claims to measure, often assessed through various methodologies.