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.

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Definitions:

Check Register

A record of all checks written, deposits made, and balances for an individual’s or organization’s checking account.

Bank Statement

An official summary issued by a bank detailing a customer's transactions and balance over a specified period.

Outstanding Deposit

Any sum of money that has been transferred or sent for deposit into a bank account but has not yet been credited to the account.

Adjusted Cash Balance

The cash balance on financial statements after adjustments for checks in transit, deposits in transit, and other discrepancies.