Which of the Following Is Not Normally a Condition That

question 54

Multiple Choice

Which of the following is not normally a condition that must be met for revenue to be recognized (recorded) under the revenue principle?

• A) The earnings process is complete or nearly complete.
• B) The promise to perform an exchange in the future has been made.
• C) Collection of receivables from credit sales is reasonably assured.
• D) The amount of revenue can be measured reliably.

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Definitions:

Ending Inventory

Merchandise value ready to be sold at the close of an accounting cycle.

Retained Earnings

The portion of net earnings not distributed as dividends, but retained by the company to be reinvested in its core business or to pay debt.

Accounting Principle

Guidelines and rules that govern the accounting practices and procedures.

Financial Statement Presentation

The manner in which a company's financial data is organized and displayed in its financial statements.