The Following Is a Diagram of the Earnings Cycle as Presented

question 16

Multiple Choice

The following is a diagram of the earnings cycle as presented by Coombes and Martin (1982) . In the traditional historical-cost accounting model,at what point has revenue been recognised for long-term construction contracts in the building industry?

• A) Point 8
• B) Point 4
• C) Point 6
• D) Point 5

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Definitions:

Opportunity Cost

The financial impact of bypassing the subsequent top alternative during decision-making.

Trade

The exchange of goods or services between parties.

Adam Smith

An 18th-century Scottish economist and philosopher, often considered the father of modern economics, known for his theories on free markets.

1776

The year marked by the Declaration of Independence of the United States, symbolizing a significant historical event rather than an economic term.