The Garrison Company Offers Terms of Net 30 Days for Its

question 39

Multiple Choice

The Garrison Company offers terms of net 30 days for its credit sales, recording the revenue from the sales when the cash is received from the customers. Garrison Company is

• A)following the conservatism constraint.
• B)violating the revenue recognition principle.
• C)violating the consistency principle.
• D)following the realization principle.

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Definitions:

Regulation CC

refers to a federal regulation in the United States encompassing the Expedited Funds Availability Act, dictating how quickly banks must make deposited funds available.

Provisional

Temporary or conditional, pending final confirmation or establishment.

Paycheck

A document issued by an employer to an employee to pay for services rendered, typically detailing the amount and deductions.

Forged

Illegally copied or counterfeited; can refer to documents, artwork, or signatures made to deceive.