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:

Oxygen

A chemical element (O) vital for most forms of life on Earth, involved in cellular respiration.

LUQ

An abbreviation for Left Upper Quadrant, referring to a section of the abdomen.

OTC

Over-The-Counter; referring to medicines that can be bought without a prescription.

Gastrointestinal

Relating to the stomach and intestines, encompassing the entire digestive tract.