Based on the Recognition Principle,revenue Is Recorded on the Financial

question 98

Multiple Choice

Based on the recognition principle,revenue is recorded on the financial statements when the:
I.payment is collected for the sale of a good or service. 
II.earnings process is virtually complete. 
III.value of a sale can be reliably determined. 
IV.product is physically delivered to the buyer.

• A)I and II only
• B)I and IV only
• C)II and III only
• D)II and IV only
• E)I and III only

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Definitions:

Right of Exoneration

A legal principle that allows a person who has discharged a debt or obligation, which was owed jointly with others, to obtain reimbursement from the other parties responsible for the debt.

Surety

A financial agreement where a third party (surety) guarantees the obligations of a debtor to the creditor, providing assurance that the debtor's obligations will be fulfilled.

Artisan's Service

The work or craft of skilled manual workers who make items largely by hand, often with traditional methods.

Lien

A legal right or interest that a creditor has in the debtor's property, typically lasting until the debt that it secures is paid.