Which of the following is not normally a condition that must be met for revenue to be recognized (recorded) under the revenue principle?
A) The amount of revenue can be measured reliably.
B) Collection of receivables from credit sales is reasonably assured.
C) The promise to perform an exchange in the future has been made.
D) The earnings process is complete or nearly complete.

Question

Quizplus · Accepted Answer

The promise to perform an exchange in the future is not a condition that must be met for revenue to be recognized. Rather, it is the promise to perform an exchange in the present or near future that triggers revenue recognition. The other conditions, such as the ability to measure revenue reliably and the completion of the earnings process, are necessary for revenue to be recognized. The collection of receivables from credit sales being reasonably assured is also a common condition, as it indicates that the seller has a high likelihood of actually receiving payment for the goods or services provided.

Which of the Following Is Not Normally a Condition That