Using the accrual basis of accounting, when is revenue from the sale of merchandise normally recognized?
A) On the date the sale is made.
B) On the date the customer pays for the merchandise.
C) Either on the date on which the sale occurs, or the date on which the customer pays.
D) When the merchandise is sold, if sold for cash, or when payment is received, if sold on credit.

Question

Quizplus · Accepted Answer

The accrual basis of accounting recognizes revenue when it is earned, regardless of when the customer pays for the merchandise. Therefore, revenue from the sale of merchandise is normally recognized on the date the sale is made.

Using the Accrual Basis of Accounting, When Is Revenue from the Sale