Revenue Is Properly Recognized

question 200

Multiple Choice

Revenue is properly recognized:

• A) When the customer's order is received.
• B) Only if the transaction creates an account receivable.
• C) At the end of the accounting period.
• 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.

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Definitions:

Constant Rate

A fixed value of change in a quantity with respect to another quantity, often used in mathematics and economics to describe steady growth or decline.

Opportunity Cost

Missing potential benefits that could have been gained from unchosen options when deciding on one.

Production Possibilities

A graphical representation that shows the maximum combination of goods or services that can be produced with a fixed amount of resources.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs representing resource allocation.