CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

According to the FASB (Concept Statement 6), revenue is ______.

A. an increase in equity from peripheral or incidental transactions
B. total cash flows from operations
C. resource inflows from an entity's ongoing or central operations
Correct Answer: C

User Contributed Comments 10

User Comment
sarath Revenues are generated when the services/goods are provided to clients.
achu Revenue is not just cash!! (trap). Think of credit payments. Those are still revenue...
jerylewis What does "ressource inflow" mean? Is not related to "cash inflows"?, and if so, it has a different meaning than "revenues" (not always related to cash) thanks!
olukayode Revenues is not the only factor that increases stockholders equity, stockholders investments do too
uchfgf sure its a cash and noncash inflows
zakia Revenue is generated from regular business transactions only! So, if you own a convenience store, any items available for sale on the shelves are part of revenue, but if you sell the shelf itself, that is not part of revenue!
RCapistrano "Resource inflows" means revenue in different forms: cash and/or credit.

Cash receipt is recognized as a cash inflow. However, sales credit to customers are not yet collected, but it is still part of revenue.
apiccion Please correct me if I am wrong but I think:
"earned resource inflows" would be more precise; since resources may flow to the company but not be classified as revenue (down payments for goods not yet delivered).
ndachie resources bring future economic benefits whiles revenue are earned gains for the delivery of products and services. the answer should be A
tlittle2 79. Revenues represent actual or expected cash in- flows (or the equivalent) that have occurred or will eventuate as a result of the entity’s ongoing major or central operations.

http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1218220132831&acceptedDisclaimer=true
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