Which of the following is true regarding the processing and recording of revenue transactions? I. The...
Which of the following is true regarding the processing and recording of revenue transactions?
|
I. |
The accurate recording of revenue transactions is important for preparing financial statements, but not important to client management decisions |
|
II. |
Invoices should be prepared and recorded once the client determines that the goods ordered have been shipped. |
|
III. |
Revenue is appropriately recognized only when the customer acknowledges receipt of the goods. |
|
IV. |
Sales transactions can be recorded as revenue upon the receipt of a noncancellable purchase order from a customer. |
Homework Answers
Answer : " IV : Sales transactions can be recorded as revenue upon the receipt of a noncancellable purchase order from a customer. "
=> this is because processing and recording of the sales transactions has to start with the receipt of the purchase order from the customer, which is not supposed to be cancelled, and ends at the invoicing of the sales and delivery to customer.
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