The Principle That States Revenue Should Be Recognized at the Time

question 13

Multiple Choice

The principle that states revenue should be recognized at the time goods are sold or services rendered is called:

• A) Adequate disclosure
• B) Conservatism
• C) Matching
• D) Revenue recognition

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Definitions:

Marginal Revenue

The additional income generated from the sale of one more unit of a good or service.

Total Revenue

The total amount of money received by a company from sales of goods or services, before any expenses are subtracted.

Negative Economic Profits

A situation where a firm's total revenues are less than the total costs, including both explicit and implicit costs, leading to losses.

Accounting Profit

The total revenue of a business minus the explicit costs, representing the financial gain shown in the income statement.