Which of the Following Activities Does Not Violate the Revenue

question 71

Multiple Choice

Which of the following activities does not violate the revenue recognition principle?

• A)Recording revenue in December 2011 for units manufactured but not yet sold to customers
• B)Recording cash received in advance from customers as revenue when the product is not yet shipped
• C)Not recording interest earned in 2011 until the cash is received in 2012
• D)Recording cash received in advance from customers as a liability when the product is not yet shipped

---

Definitions:

Important Asset

A valuable resource owned by a person or company, regarded as being critical for achieving success or meeting objectives.

Employers

Entities or individuals who hire people to perform services or work in exchange for compensation.

Decision

A choice between alternative courses of action.

Action Plan

A detailed proposal for doing or achieving something, outlining tasks, timelines, and resources.