The Following Is a Diagram of the Earnings Cycle as Presented

question 7

Multiple Choice

The following is a diagram of the earnings cycle as presented by Coombes and Martin (1982) . In the traditional historical-cost accounting model,at what point has revenue been recognised for long-term construction contracts in the building industry?

• A) Point 8.
• B) Point 4.
• C) Point 6.
• D) Point 5.
• E) None of the given answers.

---

Definitions:

Collective Goods

Goods or services that provide benefits to all members of a community or society, typically provided by the government and not easily restricted to individual users.

Tangible Capital Assets

Physical assets owned by a firm that are used in its operations and likely to provide future economic benefits, including buildings, machinery, and equipment.

Government's Ability

The capacity of a government to implement policies, provide public services, and enforce laws effectively.

Future Services

An obligation or arrangement to provide services at a later date, often related to prepaid contracts or deferred revenue.