FedZ is a local package delivery service. If FedZ uses accrual basis of accounting, when should it recognize revenue from its package delivery service?
A) At the date the customer places the order
B) At the date the packages are delivered
C) At the date the invoice is mailed to the customer
D) At the date the customer's payment is received

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenue should be recognized when it is earned, regardless of when payment is received. In the case of FedZ, revenue from package delivery services should be recognized at the date the packages are delivered.

FedZ Is a Local Package Delivery Service