Which of the Following Is TRUE When Goods Are Sold

question 10

Multiple Choice

Which of the following is TRUE when goods are sold on on an installment basis?

• A)Revenue is recognized at time of the initial sale.
• B)Cost of goods sold is debited for the cost of the merchandise sold.
• C)Revenue is not recognized until all monies due under the contract have been collected.
• D)The deferred gross profit liability is debited as cash is collected.

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Definitions:

Work-Outcome Relationships

The connection between the effort invested in work and the results or rewards derived from that work.

Desirability

The quality of being wanted or wished for as being attractive, useful, or necessary.

Expectancy Theory

A motivational theory suggesting that an individual's effort level is based on the expectation that effort will lead to a desired performance level and reward.

Expectancy

The degree to which individuals believe that their effort will lead to effective performance and, consequently, a desired outcome.