When the Conditions for Revenue Recognition Are Satisfied,on Which Basis

question 19

Multiple Choice

When the conditions for revenue recognition are satisfied,on which basis should interest be recognized?

• A) Proportionately to the length of the period during which the asset was actually made available and on the basis of the agreed interest rate.
• B) Proportionately to the length of the period during which the asset was actually made available and on the basis of the inflation rate.
• C) Proportionately to the cash collected and on the basis of the agreed interest rate.
• D) None of these

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Definitions:

Ending Work

The work or tasks that are in the process of being completed at the end of a given period, often used in the context of project management or production.

Cost System

A method utilized by companies to measure, record, and analyze costs associated with their operations.

Process Inventory

Inventory that is currently in the stages of production but has not yet been completed.

Cost Reconciliation

The process of explaining the difference between the starting and ending balances of costs in a specific accounting period.