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Basic Question 5 of 5
According to the FASB (Concept Statement 6), revenue is ______.
B. total cash flows from operations
C. resource inflows from an entity's ongoing or central operations
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
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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Learning Outcome Statements
describe general principles of revenue recognition, specific revenue recognition applications, and implications of revenue recognition choices for financial analysis
CFA® 2025 Level I Curriculum, Volume 2, Module 2.