Which of the Following Statements About the Critical Event in the Revenue-Generation

question 33

Multiple Choice

Which of the following statements about the critical event in the revenue-generation sequence is true?

• A) The most common critical event used is the receipt of cash from the customer.
• B) The critical event is the point that can be readily documented and at which all revenue is recognised.
• C) There can never be several critical events in a firm's operating cycle.
• D) Revenue can be recognised even though no action relating to the contract has been completed.

---

Definitions:

Illusory Correlation

This is the cognitive phenomenon of perceiving a relationship between variables (typically people, events, or behaviors) even when no such relationship exists.

Sunk Fallacy

A cognitive bias that compels people to continue investing in a project or decision based on the cumulative prior investment (time, money, resources), despite new evidence suggesting that the cost, moving forward, outweighs the expected benefit.

Endowment Effect

A cognitive bias that causes individuals to value an owned object higher than its market value.

Chronological Age

The actual age of an individual measured in years from the date of birth.