Enterprise and Internal Service Funds Should Recognize Revenues When They

question 35

Multiple Choice

Enterprise and internal service funds should recognize revenues when they are

• A)received in cash.
• B)available and earned.
• C)measurable and earned.
• D)measurable and available.

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Definitions:

Unit Variable

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Stock-Outs

Instances when items are no longer available in inventory, leading to inability to fulfill demand.

Carrying Cost

Expenses associated with holding inventory, including storage, insurance, taxes, and the cost of capital tied up in inventory.

Optimal Order

The most efficient and cost-effective quantity of an item to order, considering factors such as demand, storage costs, and order costs.