Select the Statement Below That Correctly Describes the Revenue Recognition

question 10

Multiple Choice

Select the statement below that correctly describes the revenue recognition principle.

• A)Revenue is recognized when it is both earned and realized.
• B)Assets will generally be recorded and carried at their historical cost.
• C)Income (revenue)must be matched against expired costs incurred in earning the revenue.
• D)Revenue will be recorded when payment has been received.

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Definitions:

Revenue Variance

The difference between actual revenue earned and expected revenue, often used in budgeting and financial analysis.

Materials Price Variance

The difference between the actual cost of raw materials used in production and the expected (or standard) cost of those materials.

Raw Materials Quantity

The amount or volume of raw materials required or used in the production process, often measured to assess inventory needs and costs.

Variance

The difference between planned or expected performance and the actual outcome.