Most companies recognise sales when:
A) the merchandise is received by the customer.
B) a customer order is received.
C) cash is received on account.
D) the merchandise is shipped.

Question

Quizplus · Accepted Answer

According to the revenue recognition principle, sales should be recognized when the risks and rewards of ownership have been transferred to the customer. This typically occurs when the merchandise is shipped, as that is when the customer takes possession and assumes responsibility for the goods. Therefore, the correct choice is D.

Most Companies Recognise Sales When