The Revenue Recognition Principle Dictates That Revenue Should Be Recognized

question 47

Multiple Choice

The revenue recognition principle dictates that revenue should be recognized in the accounting records

• A)when it is earned.
• B)when expenses are incurred.
• C)in the period that income taxes are paid.
• D)when cash is received.

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Definitions:

Power Factor

A comparison of the true power (watts) to the apparent power (volt-amperes) in an AC circuit.

Inductive Reactance

The opposition that inductors present to the flow of alternating current, due to the phase shift between voltage and current, measured in ohms.

Coil

An electrical component made by winding conducting wire around a core or forming it into a loop or series of loops, often used in inductors and transformers.

Reactance

The opposition a circuit element offers to the flow of alternating current, due to its capacitance or inductance, affecting the phase between voltage and current.