The Question of When Revenue Should Be Recognized on the Income

question 127

Multiple Choice

The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the:

• A)Revenue recognition principle
• B)Going-concern principle
• C)Objectivity principle
• D)Business entity principle
• E)Cost principle

---

Definitions:

Null Hypothesis

A default hypothesis that there is no significant difference or effect, often tested against an alternative hypothesis in statistical analysis to evaluate the strength of evidence.

Test Statistic

A numerical value computed from a statistical test's sample data, used in hypothesis testing to determine whether to reject the null hypothesis.

Critical Value

A point on a statistical distribution that represents a threshold beyond which observations are considered to be statistically significant.

Two-Tailed Tests

Statistical hypothesis tests that consider the possibility of both positive and negative deviations from the null hypothesis.