Which of the following best describes the condition(s) that must be present for the recognition of revenue?
A) The revenue must be earned, measurable, and collected.
B) The revenue must be earned, measurable, and collectible.
C) The revenue must be earned and collectible.
D) The revenue must be measurable and collectible.

Question

Quizplus · Accepted Answer

Revenue recognition requires three conditions to be present: (1) the revenue must be earned, which means that the seller has completed its obligations under the terms of the transaction; (2) the revenue must be measurable, which means that the amount of revenue can be reliably determined; and (3) the revenue must be collectible, which means that the seller has a reasonable expectation of being paid for the goods or services provided. Choice B is the only option that accurately reflects all three conditions.

Which of the Following Best Describes the Condition(s) That Must