If a Company Is Using the Cash-Basis Method of Accounting,when

question 19

Multiple Choice

If a company is using the cash-basis method of accounting,when is revenue recorded?

• A) When services are rendered, even though cash may be received at a later date
• B) When cash is received, prior to the services being rendered
• C) When cash is received, at a time after the services were rendered
• D) When cash is received, either prior to the services being rendered or at a time after the services were rendered

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Definitions:

Futures Contracts

Futures contracts are standardized legal agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Payoff

The potential gain or loss that will result from a specific investment or decision.

Ounce

A unit of weight commonly used in the United States and the United Kingdom, equal to one-sixteenth of a pound or approximately 28.35 grams.

Futures Contract

A standardized legal agreement to buy or sell an asset at a predetermined price at a specified time in the future.