Final answer:
All listed criteria, which include delivery occurrence, fixed or determinable pricing, and assured collectibility, must be met to recognize revenue from the sale of goods. The concept of price elasticity of demand is also important in price-setting decisions to maximize total revenue.
Step-by-step explanation:
The criteria that must be met to recognize revenue from the sale of goods are all encompassing. They require that delivery has occurred or services have been rendered, the price to be fixed or determinable, and collectibility to be reasonably assured. Therefore, the correct answer to the question Which of the following is a criterion that must be met to recognize revenue from the sale of goods? is 4) All of the above.
Understanding this is crucial when a company attempts to maximize revenue, as revenue recognition aligns with the actual economic events rather than just the physical transaction. The concept of price elasticity of demand can also affect decisions around pricing. When demand is elastic, lowering prices can actually increase total revenue as more quantity will be sold. Conversely, if demand is inelastic, it might be beneficial to increase prices as the reduction in quantity sold will be proportionally less than the increase in price, hence total revenue may actually increase.