Which of the following is a definition of revenue that clearly represents an

Which of the following is a definition of revenue

  • Boston College
  • ACCOUNTING 670
  • Test Prep
  • mickey888
  • 14
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3.Which of the following is a definition of revenue that clearly represents an asset-liability approach?a.Revenue results from the sale of goods and rendering of services and is measured by the charge made to customers, clients, or tenants for goods and services furnished to them.b.Revenue represents gross increases in assets and gross decreases in liabilities measured in conformity with generally accepted accounting principles that result from those types of profit-directed activities.c.Revenue should be identified with the period during which the major economic activities necessary to the creation and disposition of goods and services has been accomplished.d.Revenues are the inflow or other enhancements of assets of an entity or settlement of its liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.ANSWER: D4.Under the current-operating concept, increases in equity from peripheral or incidental transactions (transactions other than sales of products, merchandise, or services) are referred to as:Accounting Theory: 8theditionPage 4 of 14
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Chapter 12—THE INCOME STATEMENT5.Which of the following best describes when revenues are generally recognized?6.Which of the following is the primary criterion for revenue recognition applied in practice?7.Which of the following suggested bases of recognizing revenue is not permitted by authoritative literature?a.During production for long-term construction contracts if reliable estimates of the extent of progress and of the cost to complete can be made and if reasonable assurance of collectibility existsb.At the completion of production if immediate marketability at a quoted price exists for a product whose units are interchangeablec.On an accretion basis where product marketability at known prices exists and it is desirable to recognize changes in assets, such as growing timberd.On a cash basis if no reasonable basis exist for estimating collectibilityANSWER: C
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