In which of the following situations can a company recognize revenue under GAAP?
A)A contract is signed for goods to be delivered next week.
B)Cash is received for goods to be delivered next week.
C)A company completes the production of goods for inventory and knows the costs incurred with certainty.
D)A company ships the goods that it received a deposit for the previous week.

Question

Quizplus · Accepted Answer

Revenue recognition under GAAP typically occurs when goods or services are delivered or performed, regardless of when payment is received. In this case, shipping the goods for which a deposit was received indicates that the performance obligation has been fulfilled, allowing for revenue recognition.

In Which of the Following Situations Can a Company Recognize