Under the General Rule of Revenue Recognition,revenue Is Recognized When

question 6

Multiple Choice

Under the general rule of revenue recognition,revenue is recognized when

• A) marketability and market price are assured.
• B) a contractual agreement exists,and cash collection is assured.
• C) the earnings process is complete,and a valid promise of payment has been received.
• D) all related expenses have been incurred.

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Definitions:

Equivalent Unit

A metric in cost accounting that quantifies the effort invested in partially finished units by equating it to the output of completely finished units.

First-in

implies the method where the earliest goods produced or acquired are the first to be used or sold.

Materials

Inputs and supplies used in the production of goods or in the provision of services.

Completed Unit

A term used in manufacturing and production to describe a product that has finished all stages of the production process and is ready for sale.