Which of These Is Not an Accepted Exception to the Recorded

question 3

Multiple Choice

Which of these is not an accepted exception to the recorded revenue at the time of sale?

• A)Revenue recognised upon receipt of an order
• B)Revenue recognised at the end of production
• C)Revenue recognised when cash is received after the sale is made
• D)Revenue recognised during production

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Definitions:

Work In Process

Inventory that is in the production process and is not yet complete; it includes raw materials, labor, and overhead costs incurred for products that are at various stages of production.

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced to the finished product.

Conversion Costs

Sum of labor costs and overhead expenses associated with the transformation of raw materials into finished goods.

First-In

Typically part of the phrase "First-In, First-Out" (FIFO), a method used to assign costs to inventory on the basis that the first items entered into inventory are the first sold.