The Following Is a Diagram of the Earnings Cycle as Presented

question 24

Multiple Choice

The following is a diagram of the earnings cycle as presented by Coombes and Martin (1982) . Because of uncertainty and depending on which measurement model is being applied,revenue recognition will take place at a limited number of points in the earnings cycle.In traditional historical-cost accounting,in most cases,at which point in the cycle above have revenues been recognised?

• A) Point 5.
• B) Point 8.
• C) Point 7.
• D) Point 9.
• E) None of the given answers.

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Definitions:

Normally Distributed

Refers to a bell-shaped distribution that is symmetrical about its mean, often used as a model in statistics for real-valued random variables.

Standard Deviation

An indicator used to determine the extent of fluctuation or scatter among data points in a collection.

Central Limit Theorem

A statistical theory that states that given a sufficiently large sample size from a population with a finite level of variance, the mean of all samples from the same population will be approximately equal to the mean of the population.

Sampling Distribution

The distribution of a statistic (like the mean) that would result from taking a large number of samples from a population.