Revenue is properly recognized:
A)When the customer makes an order.
B)Only if the transaction creates an account receivable.
C)At the end of the accounting period.
D)Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.
E)When cash from a sale is received.

Question

Quizplus · Accepted Answer

Revenue should be recognized when the sale is completed or when services have been performed and the business obtains the right to collect the sales price. This is in accordance with the accrual basis of accounting, which matches revenues with the expenses incurred to generate them, regardless of when cash is collected.

Revenue Is Properly Recognized