Revenue Is Earned When ________

question 124

Multiple Choice

Revenue is earned when ________.

• A) there is a binding agreement to provide goods or services
• B) the journal entry to record revenue has been prepared
• C) the business has received cash from the customer
• D) (or as) the business satisfies each performance obligation

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Definitions:

Predetermined Manufacturing Overhead

The estimated cost of manufacturing overhead assigned to each unit of production, based on a predetermined rate.

Machine-hours

A measure of the amount of time a machine is used for production, often used in allocating manufacturing overhead based on usage.

Markup

The amount added to the cost price of goods, to cover overhead and profit, determining the selling price.

Overhead Applied

The allocation of overhead costs to specific jobs or activities based on a predetermined rate.