The Revenue Recognition Concept

question 130

Multiple Choice

The revenue recognition concept

• A) is in not in conflict with the cash method of accounting
• B) determines when revenue is credited to a revenue account
• C) states that revenue is not recorded until the cash is received
• D) controls all revenue reporting for the cash basis of accounting

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Definitions:

Productive Resource

An economic term for the inputs used in the production of goods or services in the attempt to make an economic profit.

Inelastic

Describing a situation where the demand or supply for a good or service is not highly sensitive to changes in price.

Loan Interest

The additional amount paid by a borrower to a lender in exchange for the use of borrowed money, often expressed as an annual percentage rate.

Loan

A form of financial agreement in which a lender provides funds to a borrower with the expectation of being repaid, usually with interest, over a specified period.