The following is a diagram of the earnings cycle as presented by Coombes and Martin (1982).
Because of uncertainty and depending on which measurement model is being applied, revenue recognition will take place at a limited number of points in the earnings cycle. In traditional historical-cost accounting, in most cases, at which point in the cycle above have revenues been recognised?
A) Point 5.
B) Point 8.
C) Point 7.
D) Point 9.
E) None of the given answers.

Question

The following is a diagram of the earnings cycle as presented by Coombes and Martin (1982).
Because of uncertainty and depending on which measurement model is being applied, revenue recognition will take place at a limited number of points in the earnings cycle. In traditional historical-cost accounting, in most cases, at which point in the cycle above have revenues been recognised? 
A) Point 5. 
B) Point 8. 
C) Point 7. 
D) Point 9. 
E) None of the given answers.

Quizplus · Accepted Answer

In traditional historical-cost accounting, revenues are typically recognized at the point of sale or delivery of goods, which is at Point 8 in the earnings cycle above.

The Following Is a Diagram of the Earnings Cycle as Presented