Which of the Following Correctly Applies the Revenue Recognition Principle

question 18

Multiple Choice

Which of the following correctly applies the revenue recognition principle?

• A)Recording revenue in December 2009 for units manufactured but not yet sold to customers.
• B)Recording cash received in advance from customers as revenue when the product is not yet shipped.
• C)Not recording interest earned in 2009 until the cash is received in 2010.
• D)Recording revenue in December 2009 for units sold but not yet paid for in full.

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Definitions:

Factual Information

Data or details based on real occurrences or facts, not influenced by imagination or theoretical explanations.

Abstract Ideas

Intellectual concepts that are often not tied to physical objects or specific instances, typically ineligible for patent protection under U.S. law.

Naturally Occurring

Refers to substances or phenomena that exist in nature without human intervention or modification.

Temporary Monopoly

A situation where a company has exclusive control over the market for a limited period, often due to a patent or innovation.