Under What Condition Is It Proper to Recognize Revenues Prior

question 5

Multiple Choice

Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

• A)When the ultimate sale of the goods is at an assured sales price
• B)When the revenue is to be reported as an installment sale
• C)When the concept of internal consistency of amounts of revenue)must be complied with
• D)When management has a long-established policy to do so

---

Definitions:

Profits

The financial gain realized when the revenue generated from business activities exceeds the expenses, taxes, and costs involved in maintaining the operation.

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

Legal Formalities

The required procedures or steps mandated by law for ensuring that legal acts or documents are valid and enforceable.

Officers

Individuals appointed or elected to oversee the management and daily operations of a corporation or other entity, typically holding positions such as CEO, CFO, or President.