Revenue Is Recognized in Most Businesses

question 184

Multiple Choice

Revenue is recognized in most businesses:

• A) When the customer's order is received.
• B) Only if the transaction creates an account receivable.
• C) Only if paid in cash.
• D) Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.
• E) When cash from a sale is received.

Understand the structure and implications of executive compensation disclosures and the impact of market conditions on capital costs.

Understand the sequential order and interdependence of different types of budgets within the master budgeting process.

Recognize the role and preparation of sales, production, and cash budgets in the budgeting process.

Understand the importance and method of estimating sales and cash receipts for budgeting purposes.

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Definitions:

Principle of Utility

A foundational concept in utilitarianism that suggests the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Kant

Immanuel Kant, a German philosopher whose work in metaphysics, ethics, and aesthetics played a central role in modern philosophy, emphasizing the limits of human knowledge and the importance of moral principles.

General Policy

Broad, overall plans, guidelines, or procedures designed to guide actions toward achieving long-term goals or objectives.

Kant's Moral Theory

Kant's Moral Theory emphasizes the importance of duty, moral law, and the principle of acting in such a way that the action could be universalized.