Sales Cycle Principle in Accounting Quiz

Recognition of revenue and expenses when they occur, not when cash is received or paid (correct)

Recognition of revenue and expenses only when cash is received or paid

Recognition of revenue and expenses based on when the invoice is issued

Recognition of revenue and expenses based on when the product is delivered

It delays the recognition of revenue and expenses

It accelerates the recognition of revenue and expenses

It has no impact on financial statements

It ensures that financial statements accurately reflect the financial performance of a company (correct)

Managing the time between paying suppliers and receiving cash from customers (correct)

Calculating the net present value of future cash flows

Minimizing operating expenses to increase profit margin

Maximizing shareholder wealth through investment decisions

<p>It may result in differences between the timing of recognizing revenue and expenses and the actual cash inflows and outflows</p> Signup and view all the answers

<p>Reduces the need for external financing and improves cash flow</p> Signup and view all the answers

<p>Optimizing the use of working capital to generate maximum return</p> Signup and view all the answers