Which of the Following Statements Is Not in Accordance with AAS

question 20

Multiple Choice

Which of the following statements is not in accordance with AAS 118 "Revenue" with respect to revenue recognition?

• A) Revenue is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity.
• B) When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a transaction which generates revenue.
• C) The amount of revenue arising on a transaction is usually determined by agreement between the entity and the buyer or user of the asset.
• D) When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a transaction which generates revenue.
• E) E: None of the given answers.

---

Definitions:

AC

Typically refers to Air Conditioning, a system used for cooling and sometimes heating depending on the air properties needed.

Total Costs

The aggregate amount of all costs associated with the production or offering of goods and services, including fixed and variable costs.

Output

The quantity of goods or services produced in a given time period.

Total Fixed Costs

The sum of all costs required to produce any level of output that do not change with the quantity produced, such as rent or salaries.