In Order to Recognize Revenue

question 5

Multiple Choice

In order to recognize revenue:

• A)the seller must deliver the product or service to the customer.
• B)the customer must take possession and ownership of the product or service.
• C)the seller must either collect the cash or be reasonably assured of collecting the cash in the near future.
• D)all of the above must occur.

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Definitions:

Joint Cost Function

A cost function that describes the total cost of producing multiple products together, where the costs cannot be separated for each product.

Economies of Scope

Cost advantages that enterprises obtain due to a broad scope of operations or the variety of products and services offered.

Cost Function

A mathematical relation that describes how the total cost of producing a good or service varies with the level of output.

Diseconomies of Scope

The phenomenon where a company’s costs increase as it produces more varied types of products or services, due to inefficiencies.