How Should Revenues Be Recognized in Interim Periods

question 63

Multiple Choice

How should revenues be recognized in interim periods?

• A) In the same way as they are recognized on an annual basis.
• B) On the cash basis.
• C) On an annualized basis.
• D) On a seasonal basis.
• E) There are no revenues recognized in interim periods.

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Definitions:

Borrowing Rate

The interest rate charged by a lender to a borrower for the use of borrowed money, often expressed as an annual percentage.

ROA

Return on Assets, an indicator of how profitable a company is relative to its total assets, showing how efficient management is at using assets to generate earnings.

ROE

Return on Equity: It's a financial performance indicator that is computed by dividing the net income by the equity held by shareholders.

Equity/Debt Ratio

An economic indicator revealing the balance between shareholder equity and borrowed funds in financing company assets.