Which of the Following Is Not an Example of the Application

question 62

Multiple Choice

Which of the following is not an example of the application of the revenue principle?

• A) Recording the sale of merchandise on credit in sales revenue.
• B) Recording rent received in advance as rent revenue.
• C) Recording accrued interest revenue on a loan made to another party.
• D) Recording the sale of merchandise for cash in sales revenue.

---

Definitions:

Maturity

The point in time when a financial instrument or obligation, such as a bond or loan, becomes due and payment is required.

Premium

The amount paid for an insurance policy, or the extra cost above the nominal value of something such as a bond or stock.

Adjunct Liability

A liability that is attached to an asset in a supporting role, increasing the amount recorded as the asset rather than being recognized separately.

Carrying Value

The Carrying Value, or book value, is an accounting measure that represents the value of an asset in a company's balance sheet, minus depreciation or amortization.