Under the Revenue Recognition Principle,a Business Should Record Revenue When

question 31

Multiple Choice

Under the revenue recognition principle,a business should record revenue when the business:

• A) receives an order from a customer for goods or services
• B) prepares the invoice (bill) for goods or services
• C) delivers goods or services to a customer
• D) receives payment from a customer for goods or services

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Definitions:

Output

The total amount of goods or services produced by an individual, firm, or country.

Average Fixed Costs

The total fixed expenses of a business divided by the quantity of units produced, decreasing as production increases.

Variable Costs

Variable Costs are expenses that change in direct proportion to the volume of output or activity in a business, such as materials and labor.