Under Accrual Accounting,the Event That Triggers Revenue Recognition for the Sale

question 153

Multiple Choice

Under accrual accounting,the event that triggers revenue recognition for the sale of goods is the:

• A)date a contract is signed.
• B)date the customer pays for the goods.
• C)date the customer orders the goods.
• D)delivery of goods to customer.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and manufacturing overhead.

Markdown

A reduction in the selling price of goods, often used as a strategy to clear inventory or stimulate sales.

Net Margin

A profitability metric calculated as net income divided by revenue, expressed as a percentage, indicating the percentage of revenue that translates into profit.

Full Selling Price

The total cost to the consumer to purchase a product or service, including any taxes, fees, or additional charges.