Which of the following statements about the concept of revenue is true?
A) Estimates are not permitted in the measurement of revenue.
B) Contributions by owners may be considered revenues.
C) An inflow of future economic benefits may be considered revenues.
D) Revenue cannot be measured at fair value of the amount receivable.

Question

Quizplus · Accepted Answer

Revenue is defined as an inflow of economic resources or an increase in economic resources owned by an entity that results from the entity's ordinary activities. This inflow must have the potential to bring in future economic benefits that can be measured reliably. Therefore, an inflow of future economic benefits may be considered revenues. In contrast, estimates are often necessary in the measurement of revenue. Contributions by owners, such as investments or donations, are not considered revenues because they do not result from the entity's ordinary activities. Finally, revenue can be measured at fair value of the amount receivable, as long as it meets the criteria outlined in the relevant accounting standards.

Which of the Following Statements About the Concept of Revenue