Donated Services Should Be Considered Revenue If the Service Creates

question 67

True/False

Donated services should be considered revenue if the service creates or enhances a nonfinancial asset and requires a specialized skill which would have had to be purchased if not donated.

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Definitions:

Consumer Surplus

The variance between the actual cost paid by consumers and the maximum amount they're prepared to pay for a good or service.

Market Equilibrium

The point at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a stable market price.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product or service to prevent market prices from rising above a certain level.

Consumer Surplus

The variation between the price consumers are willing to offer for a product or service and the actual payment made.